buyback stopped, page-33

Hi Stefanis,
OZL is putting in an exploration decline under the Malu pit. This is expected to be completed in Q4 2012.

Drilling from the decline under the Malu pit will commence in H2 2012. From the pit map (p8 of the qtrly presentation), I would be assuming that OZL would be aiming to convert the indicated resource in the Malu zone to a measured resource. The indicated resource has 1.1mt of Copper, 2.4moz of Gold and 8.7moz of silver. Even allowing for a reduction in resource from indicated to measured of 20%, that still extends the mine life by nearly 9 years. The Gold ratio in the indicated resource (1 tonne of copper to 2.4 oz of gold) is higher than what is currently being produced (1 tonne of copper to 1.4 oz of gold). The higher gold credits should help keep the C1 cash costs down if and when open cut moves to u/g.

IMO, I think the OZL strategy for this year is quite clear.
a) Move some of the C inferred resource to indicated.
b) Move some of the C exploration target to inferred.
c) Get board approval for an exploration shaft at C (commence drilling in 2013)
d) Commence gathering data so that a mine plan can be created so that part of the Malu zone can be moved from inferred to indicated.
e) Continue near mine and regional drilling.
f) Continue looking for stressed assets to purchase (really hard to find and I do not hold out much hope here, but really I do not care - they have enough on their plate growing the business they own.)

HT1