"progress report" dated 3 april asx 13 april

Although reluctant to be a critic in the face of communication .. why release a detailed "progress report" just 2-3 weeks before the quarterly? My guess is for compliance, after is has been given to a prospective new (dilutive) investor. Any other ideas?

It's more double speak ... nothing firm, little new, and firmly in the butt covering "if/then/maybe" style of Mr Ian Smith, Chairman, and therefore I think misleading to the trusting investor.

Maybe I'm dreaming but nevertheless I still do think the company has the in ground gold, and they will in time achieve production and value growth maybe up to 10 cents per share, but not without further pain... pain which would be avoided if the current lemons, lawyers, laggards, lazies and lankers would make room on the pot for a solid person, or two.

I'll write to the chairman and the MD along the following lines, and publish the reply. If anyone has any suggestions to add, I am happy to include them.

"My unanswered questions are:

1. Production: "You forecast 5000 oz gold production in 2007 ... and made 55kg of pre sales .. when are you actually gonna do it? and how much?"

Page 3 indicates "(Maxwells) 12 hour shift production target is 45k t.p.a. ... Once (feed of) ... 3 g/t is achieved ... this can give rise to 4,000 oz p.a." And "Once .. ore is available .... with a double shift ... this will double to 8000 oz p.a."

Is a target a target when there is no stated time frame? Not in any business I have run.

2. Cost: What is the f/c cost of production per oz? The projected COP in 2007 was around $430, in 2008 inferred forecast COP around $650. They made the projections then. What now?

3. Cost of Operation: The 6 months to Dec 11 financials indicated operating deficit of $558,000 + per month. Cash deficit of 340,000 per month (Source: Dec quarterly). If production 4000 oz pa. then income $ 580,000 per month. This infers break even (except the next 55kg (1800 oz) production has been paid for already). But I guess that's good - so depending on the answer to qu.1, isn't it a bit stupid to be looking at a further dilution further?

4. Company resource.

What is the total resource? (Without having each investor work it out). The exploration highs and lows are helpful, this new habit of breaking the resource and exploration targets into separate projects and not giving a total company figure is annoying. Do any other companies ann. resource for separate projects, and not give a company total?

5. A new project and more dilution - The report hints they are looking at a new project (groan) and further dilution. Um ?

6. Board - still 7? bankers and lawyers, and one geologist. They should be deeply ashamed. The miner has resigned, but I've been told by a former independent director that he was ineffective other than at computer games."