Ann: Update on Financing and Production, page-95

I believe that a majority of commentators are missing a glaring point here about how BJ is arriving at his 850oz forecast for the next 5 months. In order to have entered into very fruitful discussions with MB he would have needed to have supplied realistic production numbers to argue his case for rejigging the loan repayment schedule. Given PGI's continual ability to miss forecasts I do not believe that MB would have accepted anything other than conservative forecasts. Having used those conservative numbers to renegotiate with MB I don't think that they can then go out to potential bond holders with any different numbers (by way of forecast) as that would leave PGI open to being sued down the track if the figures failed to materialise. However, they are still able to now deliver actual production numbers to the bond market so if BJ is proven to have low balled MB then lucky old him - and lucky old us for that matter.

The forecast production numbers make no sense. We know that there was a production problem in the week ending 18/9 - What we don't know is when the problem was sorted out. The week in question is about as filthy from a statistical perspective as you can get - some of it ran at 90%, some at 100%, some with an elution circuit that was functioning properly and some when it wasn't. Most importantly, we don't know when the problem was fully resolved. It doesn't look to me that it was sorted in that 1st week which means that the problems possibly slipped into the following week as well. Bottom line is that the figure of approx 815oz in the following week is an absolute worst case scenario if one assumes that the elution problems were sorted out the previous week - if that is not the case then the actual production numbers should be higher than they are showing. Therefore, could you not argue that the actual production figures should be an average of the last 2 weeks - approx 950oz??

Maybe, just maybe, BJ might be putting himself in a position where he happily under promises and over delivers? He is perfectly within his rights when presenting to potential bond holders to tell them what his actual production numbers rather than those he used to renegotiate with MB. They would not be forward looking numbers that could be used against him at a later date.