sector consolidation, page-2

Paul.

couldn't agree more.If you own focus shares and have not worked out their "MODUS OPERANDI" or as you and me would say,"their way of doing business"then you need to do some deep thinking why your moneys here.

I couldn't give a damn about traders in and out at 9.1-9.5c and if they wish to complain about a loss,or loss of trading opertunities,that's their business.I certainly wouldn't have paid that much for focus shares in the past.

Back to the business and their "MO",just as you've seen with CRE,when economics decree,only higher grade ore is milled and uneconomic production eliminated.As the gold price rises lower grade ore will be processed,if there is spare plant capacity and a spare $100 an ounce to be made from it.

Unfortunately,that knackers per ounce costs.e.g.
say for example FML production is
75koz from 500kt ore and
25koz from the other 500kt

so at $1600 an ounce
25koz makes $100 and costs $1500
75koz makes $750 and costs $0850

result around $1200 or more av per ounce cost.

Take NST for example,running plant at half capacity and compare,their cost structure if they too took every last ounce they could with the plant capacity they have available.They have chosen not to,to enhance their cost per ounce figures,but have announced they will be doing just that soon.

I'd much rather have the extra $2.5m profit and damn the reported cost per ounce,knowing they could drop the trash,or lower grade ore,the moment the gold price fell and still produce 75koz at say $920.Yip,when you reduce production,fixed costs(+$70) get spread across fewer ounces,another HIDDEN BONUS.

The other added bonus is of course environmental,for site trash and old tailings,resulting in them being sterilised AT A PROFIT,rather than later at an unknown cost to shareholders.A lovely hidden FUTURE BONUS.

You've bought into McDonalds,not your corner high priced specialist takeaway restaurant.McDonalds practices are franchiseable and proven in hard times,takeaways come and go and rely on individual personalities and cherry picking to survive.

Your just witnessing the first of many future shop fronts being opened as well as extension to the existing premises and its messy and expensive and it doesn't look anything like its plan says it will,while this expansion goes on.There are outsiders after a free ride and a few teething problems.If you can handle the stress stay,if not maybe time to be elsewhere.

I'm in for these reasons and view FML operations as sound.CRE,i couldn't give a damn about at the moment,except those tax losses will be handy SOON.it's only $13m cash invested and to put it in perspective,we're up for near as damn $20m exploring FML tenements alone this year.Any profitable production ex CRE is just a bonus and we've just bought into future prospective bareland tenements with IDLE PLANT with development potential at a later date.We had 400 sqr km and have just landbanked another 1440 with old plant and rusting outbuildings.If we choose to only fertilise what we 100% own,then we'll graze the rest with ever diminishing returns until we do get 100% control.The tax losses won't dissappear anytime soon and FML management haven't cloned themselves completely YET.

DYOR+DYODD if you know why your in,you'll know why your no longer in as well without any angst(upset).You'll also know the moment when you should be out and have reason to do just that without a second thought.What more does one need?