CAI Valuation - comparison to peers, page-19

Hi Netraam

250 ounce per day x 365 x 90%.... Why x 90%?

If you are factoring in a 10% dilution that is double counting. The grade delivered to the mill already includes the dilution... i.e. the month of December the average grade is .85g/t which is the final number after factoring dilution.

The plant is rated to mill 2.4M tonnes per year which equals 200,000 tonnes per month. December throughput was 191,077 so there is a 5% gain to be expected on throughput from now on (not including the possibility CAI might successfully run it about 8% harder... i.e. 2.6M tonnes per year). The final week of December produced 240 ozs a day... if we assume 225 ozs per day (as the average of the last 2 weeks) that puts annual production at +82,000 ozs/year.

The breakeven point for CAI appears to be somewhere around 70,000 ozs per year (while it is paying off the debt at $36M/year) which leaves the 12,000 ozs which it can sell at the spot price and represents pure cash profit of about $30M at a realised gold price of $2500/oz.

These seem achievable numbers to me and represents the low end of expectations by my back of the envelope chicken scratchings. In 3 years time the 36M/year which is currently to pay the debt will start to come to share holders... and this is only considering Warrawoona. Blue Spec and the Pirra JV will be on the top.