ATM, page-104

The example you gave does have relevance, but also some stark differences:

• Smaller does not always mean less efficient or less profitable. I agree that economies of scale are a consideration, but larger organisations and operations introduce their own inefficiencies.
• Happy to concede that costs in OGX Brazil operations were out of control, but also happily the new board have, as one of their missions, the goal of reducing costs (and no doubt regaining control).
• Wages in Australia are considerably higher than in Brazil (multiples), and while I was on $140k plus super driving a loader north of Kalgoorlie, a miner in Brazil will receive a much lower amount, despite advances in employment and safety conditions.
• As AISC ("all in sustaining cost") is measured in dollars per ounce of gold produced, and as the major cost involved is mining and processing of ore ...which is a cost mostly relative to the amount of ore mined and processed then if a grade doubles the AISC should go down by the same factor.
• The costs are (almost) the same, but the amount of gold has doubled. OK, you might need a bigger truck to take the gold away, and you might need to spend more time getting the gold off the mats, but this rule applies generally as far as I can tell.
• I don't have it on this computer, but TROY reported some of the lowest costs in the world when they were mining Sertao, especially in the early years (cash cost less than $200 / tonne at one point. It's simple arithmetic.
• I'm not claiming I know exactly what Cascavel's AISC will be, what I am saying is that if the grade is 15 g/t it should result in a reasonable AISC, if it is 30 g/t it should be (of the order of) half that reasonable ASIC figure.
• In other words, instead of banking $5-600 Oz as profit, we may be banking $1,000 - $1,100 Oz as profit. Big difference. I don't know what it will be -but the arithmetic is compelling.

Appreciate you post Rarebird,

Nothing wrong with being conservative ...and I don't want to give the impression of being a rampant up...ramper. But a lot will depend on the grade (and the amount we have produced) -and that being applied to the evidence of our mineralisation ...as I have researched and posted plenty. Other areas will be icing on the cake ...as long as we have a cake

Good luck for a great result in the next few weeks everyone.

Please feel free to correct me or make relevant comments.

Cheers,

SJB