another round, page-25

The last annual report
The carrying amount of inventories at 30 June 2009 was $13,808,636
Inventories are measured at the lower of cost and net realisable value. (Inventories are measured at cost given the POG).

At June 2009

Stockpile – at cost 8,623,317
Gold on hand – at cost 4,054,023
Gold in transit – at cost 1,131,296

Gold on hand at 30 June 2009 has a net realisable value of $6,800,154 [2008: $10,766,343] measured at spot
rate. The gold in transit at 30 June 2009 had a net realisable value of $1,897,618 [2008: 1,653,852].

AUSD POG is roughly the same as now so net realisable value should be a similair multiple of inventory amount, 1.7.

Ore stockpiles would require treatment but are valued at cost of mining but net realisable value should be a multiple >1.7.

I was unsure if the increase in inventory booked as revenue was due to an accounting change or from stockpiles becoming gold on hand.

Now they have 9m cash + 19m inventories= 28m
If its 9mcash + 19 *1.7=41.3
That makes it a lot more interesting given market cap is 45m.

Cost is determined on the following basis:
• Gold on hand is valued on an average total production cost method;
• Ore stockpiles are valued at the average cost of mining and stockpiling the ore, including haulage;
• A portion of related depreciation and amortisation charge is included in the cost of inventory; and
• The valuation of gold in circuit is based on our Toll Treatment Agreements which incorporate the best
acceptable metallurgical practices.