bretts reply

Reply from Brett, I don't think he'll mind me reprinting this as anything and everything to get the company's thoughts and plans out there to investors is a good thing imo.

'Rest assured that we are not simply out to build the biggest mine possible, value is the key driver. However there are many factors to weigh up.

One of the key advantages we have at Bullabulling is scale. By developing a high throughput mine we will keep unit operating costs down and maximise the amount of gold we can profitably extract. If we were to halve the throughput rate we would only reduce the capital cost by about 30%. However we would lose economies of scale and increase operating costs. To deliver the cash costs in the $1,200 optimisation scenario in our release, we had to operate at 7.5 Mtpa.

If we try to maximise grade, we would have to mine more selectively, meaning more tonnes of waste for each tonne of ore, pushing up operating costs. Mining selectively rather than taking a bulk approach would require changing techniques and using smaller scale equipment, which would further increase costs.

We do have some degree of flexibility and believe that we can still develop a substantial, profitable mine even at gold prices that are lower than we are seeing today.

Our objective is to do all the things you have outlined below, but not beyond the point at which they become counterproductive. The focus of the current feasibility study is to get the balance right and deliver a mining proposal that can attract the funding necessary for its implementation and generate sound returns for the company’s shareholders.

I agree that we have to demonstrate that given any reasonably foreseeable economic conditions this mine will happen.'