Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-17

If people are going to complain about anything, it should be the related party expenses that occurred through the quarter, not delays....

PAYMENTS TO RELATED PARTIES OF THE ENTITY AND THEIR ASSOCIATES

Payments made during the quarter and included in Item 6.1 of the Appendix 5B – Mining Exploration
Entity Quarterly Cash Flow Report, comprise the following:

Item 6.1: Aggregate amount of payments to related parties and their associates included in cashflows
from operating activities is $1,376,000:

$’000
Remuneration 102
Directors Fees 71
Payments to Director Related Entities (Development) 1,203

Total included in 6.1 1,376

Unfortunately I don't fully understand the mining/drilling process or what a reasonable budget would be. But obviously if I was able to I would be asking the question if these costs are reasonable and in line with if say an independent 3rd party came along and did it. Unfortunately I dont think audit reports assess this kind of stuff.

Walsh made it clear in the ( I think Oct ) interview that we would have a larger than usual cost this quarter for drilling so it was highlighted. Its not like we didnt see this coming. But to what extent is it an accurate cost? Isnt the pit an existing mine? Why was drilling it out a further 1.2M to a related party business? Shouldnt this work be conducted by arms length? With about 3 qtrs of cashflow left a capital raise for funding will likely occur when the capital raise for Capex occurs. We have about 3 quarters left and I dont believe the burn rate will be as bad in subsequent quarters. I have already said expect a capital raise soon as we will need funding for capex.... They will likely put a top up amount to help fund the next few quarters as part of it.

If anyone can shed any light on why the drilling is being completed under non-arms length this would be greatly appreciated. I will say it is a little bit of a red flag to me because you can easily overstate your drilling quote and funnel money from the business.

Further discussions and thoughts appreciated....