low operating costs, page-16

Nklex,

I want to clarify that the Cost ratio you put forward is actually a good tool to have in the kit when comparing companies.

It is difficult comparing companies at different levels of progress and until PEN JORC up then it really is all what-if, which I take great pleasure in doing.

But once PEN do JORC up and lets say 100MLbs at the end of 2010, then that will immediately have an in-ground market value of $US6.5B at the current long-term uprice of $US65 and as PEN is targeting.

Production volume is what will realise that value. Yes there a lot of variables but the wonderous thing about ISR mining is its low fixed costs as opposed to the high fixed costs of conventional mining methods and is what will allow PEN to be so adaptive to uprices.

I am sure there will be much more discussion on the subject matter.

regards, jj