respect to beerbaron. well deserved., page-3

Gizmo - really nice reply from you, thank you. I understand better where you're coming from. Sorry for the late reply but I've just finished work.

I have a few thoughts on how the drilling is done. Not trying to convince you one way or the other, these are just a few thoughts. Salem first.

I can remember several months ago people asking why hasn't Salem been investigated. So if they hadn't drilled there some would be unhappy. I respect your opinion that you think it was a waste of time, but if they hadn't drilled there someone else would've been upset.

Now Salem has been (to me) a bit disappointing. It's not the length but the quality ie the grade. If this had been the same as the main ore body the grade would have been 400-500 ppm, and the total about 10 Mlb instead of 5 Mlb. I wasn't aware that the type of rock was different at Salem from the main ore body (read the latest report for more details, I'm being quick here). If it had been the same it might have indicated yet another large body of uranium and we'd be jumping for joy. At least now we know what the mineralisation is and there is a possibility that further Salem type deposits that may be found at shallow depths.

As for drilling one hole vs 14, those truck rigs have to drive several km over desert, no roads. I don't know how long it takes them to traverse to a new site, survey the exact location, set up the drilling rig and start drilling. But I'd imagine that once you're in position you might as well drill a few holes because it's a lot of effort and if you drill just one you're probably wasting a lot of time.

There's also the problem of knowing the drill results in the field. What they do is use a handheld spectrometer (HHS) to get an idea of the grade. This is subject to significant error - for example, in the first JORC a comparison was done of the HHS vs the assay results and it found that, on average, the HHS over-read by about 25%. But the scatter is huge. I've got every drill report and can compare quite a few holes with their HHS and also the later assay results and sometimes they're way different. So the guys in the field might have a completely different idea of what the drill results are, and won't know they were wrong until the assay results come out a month or two later.

One of Salem's attractions was it was shallow. If the resource there is attractive enough it might be a useful starter pit to generate money to help finance the bigger pits. Managing cash flow at the beginning of a mine's development is, I'm sure you're already aware, quite important.

On to the Z1-Z2 gap. I'm not too worried about the gap between Z1 and Z2. Yes they probably meet, we know that. It's likely to be very deep and any uranium there won't be dug out for a long, long time. So while it will add to the resource it's stuff that will be dug up towards the end of the mine's life, not quite as important as stuff we can dig up in the next 10-20 years. Probably worth putting one rig on but we really want to know about other areas first. This one rig has to drill deep, probably close to half a km. That takes a lot of time for each hole. It doesn't surprise me that we haven't had a result yet.

You made a comment about the number of data points at the southern end of Z2 & Z3 being insufficient. It is possible that the zone is not contiguous, in which case you'd be right. At the very southern end (7500000N) it seems the ore may bifurcate into two "trouser legs" and my estimate at that point may be a bit off. But I expect that the majority of Z2 is contiguous, and I'm confident that my method is somewhat conservative. I'm not saying your wrong and I'm right, but on the balance of probabilities I'd say it's a pretty good stab at a ball park figure - which is all anyone should expect from a rank amateur like myself.

OK, I've left the best for last. I think you're a bit frustrated by the seeming slow upward progress in resource size. It seems to me that, if EXT was wanting to develop the mine on their own, they would concentrate on the existing discoveries, drilling more and more in the same locations, to turn the results into Measured instead of Indicated and Inferred. OTOH, if EXT wanted to be show pony and trail her petticoat to the world, then the drilling would scatter the desert with those lines that are spaced at 400 m east-west, until the whole desert had a pattern of dril holes. This second technique is all show and no substance, as you can't bank on (JORC) the resource. Obviously any company steers a line between those two extremes. It seems that EXT leans towards the first rather than the second. This is a slower build-up but it does get us closer to the BFS/PFS stage which needs to have Measured resources.

It's hard to be patient, but look where we've come. We get drill results every 6 weeks on average (the last four were 22 Jul, 31 Aug, 9 Oct and18 Nov). We've gone from 108 Mlb in Jan to 413 Mlb in Nov, or 30 Mlb per month on average, and the rate has been pretty consistent throughout that time. This means we'll hit 500 Mlb by Feb next year (curses, I had hoped it would be by end Dec), and officially be the second largest mine in the world shortly thereafter.

And I suspect that is what the main players want to have before we get sold off.