Ann: Trading Halt , page-18

On the face of it, it looks like a good deal as they are earning around 700K/oz for a $2M spend. However, the $2M spend only earns them 35% across the Plutonic Dome project, which translates to 245K/oz. These ounces are all in the M&I or Inferred JORC status so they cant go to mining (confidently) without upgrading to reserves. The other thing to note is that some of the resources are based on low COGs (cut-off grades) using high gold prices as inputs. They state "conceptual pit shells at A$1,700/oz" - I very much doubt we'll see those prices in the next 10years.

The grades are very high by australian standards but they are intercept grades. The average grades would be somewhere in the vicinity of 3g/t total, which is average (not low, not high). I can see why they want to prioritise K2 and Trident. In summary:

1. K2/3: existing OP mine. Recover 108Koz at 4g/t. But again, its in resource category so you wouldnt want to start digging based on this. Also the interest would only be 35% which is 35Koz net to ORD. If they can manage to get the resource out and truck it to Barrick's plant the operator will charge ORD min. $700-900/oz for processing. So ORD could make a margin of maybe $500-300/oz. However, there would be other costs like OP mine rehab and mining (digging) and transportation costs. Im assuming that some rehab would be required to the OP mine.

The UG decline is the same story. Probably some rehab, extra stoping required to get to the existing resource. At the minimum its there, just some upgrading and rehab required to access the ore. It would be interesting to understand why mining ceased there.

2. Trident: largest single resource deposit, but its all UG at 376Koz. In this case there is no decline or existing UG mine. Its going to be expensive to develop an underground mine to access those resources so they'll need to delineate a larger resource/reserve in order to make a decision. This could possibly be funded from K2/3 cash flow (if in fact it is CFpositive).

Then, there is the burning question in my mind - if $2M can be assessed for a 35% interest, why spend it in WA? Why not NT where SJ is stationed and we know more about the resource/geology. I would have thought that any move to consolidate gold resources would be done nearer to existing assets particularly in the Tanami region where operators are struggling. Key question, how does SJ fit into this?

This is a first pass look at it. In all fairness I'd need to do a bit more research and talk to Frank before making an accurate assessment, but from what I have gathered it doesnt make a lot of sense.