confused, page-9

Stash,

You wrote ‘Whatever individual interpretation's of the FML and CRE Q's are, the bottom line is that it was not profitable, when the gold price has been at unprecedented high levels.’

How do you figure that the past Q for fml was not profitable? The quarterly reports are all about cash flow, not profit. It is cash flow that is important to a business and keeps it alive and I see no problem with their situation – cash and bullion at $14.3mil plus the loan facility to cre (expiring the end of this FY at 8% interest) to call in. Cash and profit are not one and the same.

With fml’s past performance ($10.8 mil profit year end June 2010 and $7.6mil profit year end June 2011), the rise in the gold price in the last 6 months, and with the second best mining quarter on record fml are positioned for a tidy profit last quarter, which should only get better throughout this financial year as costs are controlled and days are not lost to rain, a mill reline and the dreaded December shutdown.

If you want to discuss cre’s profitability, then do it later in the year when you have given fml a chance to turn cre around like they said they would. They are already making improvements. We know cre’s past performance. If fml are successful with cre there will be a huge re-rating in stall for cre/fml, depending on how the acquisition of cre pans out over this time.