Ann: Kanmantoo Economic Assessment Confirms Outstanding Potential, page-162

HI Stan,

How did you find the Hidden Gem Opportunity?

6-800mm round rocks???? The only thing round I'm aware of is the Crystal Ball.

Its hard to believe the markets reaction to the Stage one Study that forecasts, $100m of free cash flow per annum operating the plant at 40% capacity from a small part of the main Kavanagh Lode and a smaller part of the Nugent lode.

Have a look at all the other lodes that are coming soon. If they can be mined in conjunction with Kavanagh and Nugent, and there is absolutely no reason why they can't, then HGO could easily be producing 40KT of cu per annum and every cent above US$2.22 would go to profit from operations. .

Mind Boggling:

*@US$4 operating profit of US$157m ($225m)

*every additional US$ piles on $126m

Of course in the unlikely event the copper price drops below US $2.22 the cut off grade is adjusted up, the plant throughput falls but the end result from process a smaller volume of higher grades is still excellent. Have a look at all the over 2% stuff in figure 2. You don't have to process big volumes of 2% cu to pile on the free cash flow.


MY crystal ball is seeing a very bright medium term picture.

Mine development is forecast to progress pretty quickly after initial funding and FID and should accelerate with self funding until the plant is running full. Reading between the lines the plan looks like:

* Branch off the decline into Kavanagh and west Kavanagh
* Develop Nugent
* Branch across into Spitfire and SW Kavanagh and join the two declines
* reach out to North Kavanagh

That leaves Paringa, Cross Roads, Emily Star, Valentine and Matthew.

The ball continues its excitement armed with the knowledge that Stella and North West Kanmantoo are right there and Mt Rhine and Kanappa are only 50 Kms away.

Lachlan just needs to keep Peter focused on Rolling the dice on all the stuff closest to the plant until he's got 4 or 5 years of of full capacity mine life sorted. Then once he's sorted replacing the resources as they are depleted let him loose of his passion to find a hidden Hill of copper bigger than Broken Hill and Prominent Hill.

I won't be surprised if he does given all that TMI Aeromagnetic stuff the SE.









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