scoping study result vs upcoming pfs..., page-17

Hi Philley,

You are correct in saying that Gillian is the highest grade deposit that they have currently unearthed, however, it is hardly high grade. CSD, with all those tenements, could have continued exploring for another 5 years, sucking cash from investors through Cap Raisings, had a billion shares on issue, a depressed share price and still no forecast of income. Unfortunately, many companies take this path and only a rare handful of them actually ever reach any significant milestones. I personally think that CSD is going to achieve a nice balance between exploration and production cash flow.

I understand that the PFS will include Gillian, Pinnacles and Windermere, thus, it should already allow for inclusion of higher grades at 0.78% and lower grades at 0.41%. The cost of production (which I am hoping will be around $13K), will allow for all of that tin going through the mill, high grade and low.

As you correctly state, we then have maintenance, admin, exploration and balance sheet adjustments (which won't affect cash flow) to take into account when determining profitability. Irrespective of how costs are determined, we can all see what drops out and put different expenditure items into the correct basket later.

Historically, raw cost of production has been a blight on many companies starting out as a high cost of production results in a lower cash flow and a significantly higher exposure to a falling commodity price. If we can have a low cost of production which is often times difficult to control, then that only leaves many outlying expenses to manage which are easier to control (such as admin, exploration etc....). I will leave Capex out altogether as I don't have sufficient data to yet determine how that manage their balance sheet.

At the end of the day, its all a balancing act. I am confident that CSD has done well in recent times and feel that given the history of the tenements they own, that it is only a matter of time before we see deposits with greater than 1%. I am glad they are working on low grade now while the tin price is continuing north and not standing around digging holes looking for the magical company maker.

All the best. Your posts make great reading.