rights issue with little downside risk, page-3

Hi 1trader,

Hopefully the below will help:

(1) Hedging details are on page 20 of the Prospectus
(2) Metal price and exchange rate assumptions are page 18
(3) Operating cost per t on page 19

My take on the $500k surplus on $10.8m revenue for July-August is that (as stated) it includes "operational, capital, environmental and management costs". As the tunnel development continued during these months this would be a large chunk of costs along with water management equipment installation/ management/ mine downtime. Thus, IMO, the capital cost component will drop significantly and soon along with elimination of increased opex associated with getting the water management systems up to the new spec's.

As it stands rights now the AUD effect on metal prices compared to BSM's assumptions (page 18 of Prospectus) are:

Zn -11%
Pb -17%
Cu -11%
Ag -11%
Au +13%

(Based on: AUD 0.98c; Zn 85c; Pb 88c; Cu 3.33; Ag 30.33; Au $1,617)

That doesn't take into account the BSM hedging.

On page 21 of the Prospectus in the "sensitivity analysis" table you can see that BSM is still cash flow positive under this scenario.

Cheers
John