Ann: Operations Update , page-5

Kookaburra

I understand there is around 68k ounces in the levee material which does not need the crusher. This is lower grade stuff which I got told averaged 0.69 grams per tonne. There is also some other material at higher grade (1.3 grams/tonne?) which needs a screening process and could go into the mill without requiring pre-crushing, which could keep them gong for some considerable time.

The issue with processing these lower grade materials is that the cost per ounce produced go up substantially because the level of production would be a lot less than the planned 150k pa, and hence one needs to consider whether they could generate enough cashflow if for some unfortunate reason it took a much longer period for customs to give its clearance in relation to whatever it is needed for the crusher. My rough calculation is that they should have enough revenue to cover costs for a long time, assuming they get into production.

What I did not know was that there was an issue with the electricity supply. I do not know how serious this is, but it makes me question Chuck's managerial abilities. This should not be something that needs fixing at this stage of the game.

loki