new global low, page-85

Zachary,

When CDU had a large shareholding in QMN, a joint venture drilling program at Morris Creek was a serious possibility
It made sense. What soured the relationship I do not know but, when CDU disposed of their shares in QMN, that was the signal for me to discontinue thoughts of investing in QMN.

The message I was endeavouring to convey was that not only is deep diamond drilling expensive but a lot of preliminary exploration work is necessary to avoid missing the target.

CDU had the advantage of having drilled over 200,000 metres[ now over 300,000+ metres] and finding rich deposits from surface on which to optimise their successful deep drilling program which is still a modest one but has proven ore body at depth for exploitation into the future.

It will be many years before underground mining is contemplated as plant for low cost open cuts at 3 million tonnes per annum has been ordered.

I do not know if Morris Creek has an ore body from surface to give an indication where those deep probes should go but, even if a good find is made at depth, the costs of mining underground would be beyond the financial capability of QMN as its finances now stand. Establishment costs for Xstrata to go underground at Ernest Henry for example are hundreds of milions of dollars.

Who knows if CDU has completely lost interest in Morris Creek? Time will tell.