Ann: Response to ASX Aware Query, page-105

apologies for the long post

Guys, we need to get over this debacle and move ahead. We know there was some mismanagement of funds clearly and MA got shown the door and AC probably in shame took responsibility/ownership that he didn’t keep an eye on him and resigned.

What’s next,
We know there is gold there and the new production targets of 8-9kozpa gets us to 100kozpa which was our 2022 target. Fine this target seems pushed out 6 months due to equipment costs etc due to sanctions. Now the sanctions are gone and FFX can get back onto doing what w ki e expect it to do… mine that dirt and produce some gold for us.

A new plan is needed for us to see how much additional cash is required.. $50mil in kitty .. at 9k ounces per month..
Let’s say’s we do 7000oz per month x 2500(aud) - AUD $17.5mil thats AUD$ 52.5mil for the quarter from sale of bullion for the July-Sept quarter. And if I assume the same target for next 12 months.. We surely wouldn’t go through AUD$210mil (52.5x4) +$50mil = $260mil AUD in next 12 months.

we blew costs due to additional $20mil we paid for LLL, else we would have 60mil in kitty with a 10mil pm hole fr
Can anyone please run the numbers ??

Things we need transparency on,
what’s the new AISC for the next quarter, 6 months & 12 months and we need regular monthly updates on production targets, costs, are we we within the AISC or blowing cash etc etc.. plus the cut the ties with the contractors that have been sucking blood out of FFX.

We have done a fair bit of drilling in last 6 months and we can halt the drilling for now to reduce costs while we scale up production (which is in the new plan). We haven’t seen those assays from all the drilling so let’s check these out at our new lab(to come out in sept quarter). This Fat lady can still sing and it will. I still believe in Morilla and Big fat Gorilla will roar. It’s just been a little hungry lately.. I can see the positive .. When I take 2 steps back and look at the bigger picture .. MA thought he would meet the targets and was happy to pay extra to meet those.. when he couldn’t, he left as he felt responsible for blowing cash .. AC left because he felt he let the shareholders down.. but they left after putting a new plan in place with revised targets (I know pushes the guidance by 6 months but hey we will get there).. inflation punch did put a hole in that financial wall.

Let’s see who bled FFX out (my guess is that the new local contractor promised sky and was paid handsomely to get equipment etc but failed to deliver and this is where management drop their ball. MA kept paying him to meet those targets with the BOD not knowing till the very last.)

Lets reset and continue to sail, we are not far away from the journey of being cashflow positive (goal post got kicked down the road.) Once others see what I saw, the sentiments will change.. selling will go away ..

Mcap - $236mil
Cash - $50mil approx
LLL shares - $95mil approx .. @70c this is worth aud$150mil
$$ from Bullion sale - AUD $5.25mil
money owed by LLL - $10mil
Tax credits - AUD$ 35mil ( we were meant to use part of this but couldn’t due to the government being hit by inflation.)
equipment and Morilla is definitely worth more than $70mil (not counting tax credits+money owed by LLL)

We increased production by 30% from 10k ounces previous quarter to 13k ounces this quarter.. next quarter we are looking at 24-27k ounces and will gradually get better as we mine higher grade and with no sanctions costs will come down..I’m guessing revised target between 85-95ounces for the year.. fine we blew costs and fell short last quarter but that’s not the end of the world. We had some bumps and let’s over them and get back to business .. let’s make this baby sing.

All the hard yards have been done in getting this baby up .. only a slight last is needed. Fundamentally gold is still there, we just need to put a tap on the costs and get the higher grade ore processing till we get our house in order..

Bring on the quarterly !!