Ann: Edikan Gold Mine Update , page-23

Been looking for an entry point since $1.00, and wasn't able to find one, and now we know why. Agree that Tengrela will be put on ice indefinitely until they can stabilise(?) the situation at EGM.

Not sure what Mark Calderwood will be making of all this, I was never able to figure out if he jumped or was pushed, but things appear to have gone a little pear-shaped since he stepped down.

The other issue they'll need to consider is if the POG heads further south, then the cut-off grade that their Reserves are based on may need to be re-visited. PRU Reserves last updated in Aug '12.. two of the key assumptions Reserves are based on are the estimated POG and estimated mining/processing unit costs.

The deadly combination of increased mining/processing costs coupled with a falling POG can have a dramatic impact on Reserves. Ounces can migrate out of Reserve back into Resource, current cut-off grades are no longer economic, and pits can become unprofitable. The correct response would be to re-optimise the satellite pit shapes based on a new "estimated" POG and costs to generate updated and realistic final mining shapes, and new cut-off grades.

Think of this a "scaling back" of operations, smaller pits, less Reserves, shorter mine life.