the year ahead

Hello gentlemen. It's your old mate back again. I couldn't help but have a look at the Quarterly cash flow report and upcoming options deal. I thought I'll make a comment on my findings.

Now cash at end of the last quarter(31st dec 2008) was a reported $288,000. MCO also have an extra $715,000 from the cash raising at 10 cents late in the year and will soon have $1,237,797 for the 1 cents options.

That's a total of $2,240,797 cash. This will be needed for another 5 quarters. That's because the exercise date of the new options is not until 31st March 2010.

I'm also assuming they will do no further capital raisings before the options expire.

Now lets have a look at the last 6 Quarters and see how much money they have spent.

Exploration costs (000)s

31st Dec 2008 (512)
30th Sept 2008 (792)
30th June 2008 (634)
31st Mar 2008 (573)
31st Dec 2007 (1015)
30th Sept 2007 (679)

That's an average of $700,833 for exploration a quarter. So obviously they will need to reduce exploration significantly. (5 quarters X $700k = $3.5million)

Administration costs (000)s

31st Dec 2008 (142)
30th Sept 2008 (185)
30th June 2008 (189)
31st Mar 2008 (164)
31st Dec 2007 (101)
30th Sept 2007 (77)

Average administration costs are $143,000 per quarter. Admin costs are a given, so for the last 5 quarters the cost was $781,000.

Ok, so MCO have $2,240,797 for the next 5 quarters. Take away Administration costs of $715,000(allowing for an average of $143k a quarter) and MCO are left with $1,525,797.

The Maxwell pilot mining program has a price tag of $450,000.

That's $1,075,797 left for all that comes under "exploration" for 5 quarters. That's an average of just $215,000 a quarter. Remember the average was $700,000. The exploration budget for the year is more like a quarterly budget of last year.

Most of the exploration will be in the Library going through the old mining reports.

So in wrappping it up, it seems MCO will have a very tight budget this year. Sure they may be looking for investors or a partner but this is 2009. Have a look around.

Best of luck.