Ann: Company Update - Bullant Gold Mine , page-18

bandwagonjumper

you are wrong on some points.

first of all, all things being equal, a doubling of grade cannot result in a "greater than halving of the costs". mining and treatment is all done on a "per ton basis". a doubling of the grade, can only lead to a halving of the costs - and not 1c more.

the following comments are meaningless

"King of the Hill: Power from Diesel Generators
Bullant: Power from Horizon Power :"Goldfields interconnected Grid"

King of the Hill: Water from multiple Borefields.
Bullant: Water from Western Australian Water Authority (WAWA)Kalgoorlie supply"

the above costs are meaningless, if the ore is being toll treated (which is what watso's post was all about - ie what is the present cost of treating the ore. your points might mean something, if the company has its own mill.

re

"King of the Hill: FIFO operation from Perth with associated Camp structures.

Bullant: Drive in drive out Kalgoorlie, workforce domiciled in large regional centre."

the above might be correct - but look at the present production of kmc, compared koth. relevant costs, are spread over a massively greater production.

kmc have not released any numbers - yet one would think that if they were really good, then they would have made an announcment. gross revenues are meaningless, unless costs are known.

ok - just some quick numbers

koth - grade 4.5 gm - mining costs $534 per oz
kmc - mined grade is about 3.4g/t (as per what has been delivered to barrick - and assuming 95% recovery) - all things being equal, this amounts to about a mining cost of $700 per oz. kmc are using higher cost mining- which results in less dilution - so the 3.4g/t is being mined at a higher cost - a stab in the dark, could be 20% higher - so the mining cost becomes $840.

the processing costs of the koth ore is $194 per oz - after allowing for grade differential, that becomes $250 per oz. koth costs, are at cost price - not a toll treating price. do not be surprised if the toll treatment price is about $400 per oz (about $40 per ton of ore) .

the combined figures of the above, amount to about $1240 per oz - then add state royalties (who knows - maybe there is a royalty to the previous owners???) and then site services, and then depreciation.

there will be some minor cash flow - but the market is correct on this stock.

oh - one thing - but watso was fooled in the lumacom days - the directors were selling - but this was glossed over (indeed, the shares went up, after the directors were selling) - but the head honcho buys this stock, and the shares fall