quarterly results, page-29

My assessment of the quarterly was neutral in terms of positives and negatives but pleased overall that it is steady as she goes in terms of timelines and progressing towards BFS and PFS. As noted by Capt / Tibbs etc the 2 issues that we can take as carrying with them and element of disappointment are:

1. The Onjamba drilling results to date. Expectations had built a bit around this and so far are a bit disappointing but that is to date only and it is by no means a dead issue. We also have to temper this with the Onkelo and Oshiveli drill results that were fairly positive and may yet yield some additional exciting results. That is the game we are in and we have to accept the highs and lows of prospective drilling results. As noted, Anomaly A is currently the main game in town and most importantly is progressing to plan. That is the best of news. Success with additional targets are a bonus and I am confident will come with time.

2. I also noted immediately the higher production cost estimates mainly because they were materially different to what had been previously stated - those previous figures being in the low 20's. Clarification on this issue is something I would be useful and that I'd like to seek from the company. In relation to the issue of production costs and as the Capt pointed out these are (a) no doubt conservative on the part of Coffey (and necessarily so for the purposes of the PFS and BFS) (b) they are noted as representing the expected average cost over the first five years of production and (c) are approximations only and are accurate to plus or minus 30%. At US$30/lb, on a cup half full assessment, this could still well leave us in the early 20's as previously. On the basis that previous estimates were in the low 20's it is pretty reasonable to assume that the cost estimates noted in the quarterly are to the high end of what will actually transpire. Low acid consumption and the success of heap leaching extraction trials to date lend further support to this line of thinking.

In the near terms I expect a decision in respect of the capital raising will need to be made with the drawdown date of 16 June looming in respect of the second tranche of A$10m from Resource Capital.

Question in my mind is what, if any, tricks up their sleeve do they have to boost the sp in advance of a capital raising in the next couple of months. What could potentially be in the pipe - an updated resource estimate ?, release of pending drilling results ?,moving resource to reserve status ?. I'd be interested in any reasoned punts on this point. Certainly, I would be a little disappointed is they did nothing - unless they pulled one out of the bag on the capital raising that represented a real positive for shareholders.