Ann: Letter to Shareholders, page-74

1 (assumption) the resource is NOT ready to mine.
(a) requiresredrilling
(b) requires a new MRE
(c) requires a new pitmodelling/design

to what extent does it need to beredrilled?
(assumption) all costs for the above will be solelyfunded by BCN
Wet/Dry adjustment.. will this be minor? say 1 or2%.. or if the rock were to be very porous, could this be 10 or 20%which not only would reduce the contained ounces, would also possiblepush some of thouse ounces outside the pit model

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2 the resourcedeposits
lets break it into 3 parts .. (and apologies in advancethe assumptions are going to be wholely unreliable)

part 1

Lizzard 194k tonnes(3 months processing) at 3.8g/t for 24k oz … not factored miningefficiency or density downgrade… for now lets say we can get 20k ozout fo it

part 2

Iguana open pit 4.1ktonnes (5 years processing) at 1.7g/t for 226k oz… lets call it180k mined ounces (or 30kozpa)

Lets assume Lizzard wouldbe used in the GL ounces to get the first 76k ounces processed.. itsa lower AISC fro GL and it accelerates us to the point of Jaurdibeing abck to processing 100% for BCN.. so its kind of a win win

3 months + 22.4months to produce 76koz (just over 2 years) with BCN having 18kozannual production for that period

remainder 3.2 years for94koz remaining less 4% royalty and higher transport costs

part 3

Iguana Underground.671K tonnes at 3.1g/t for 68k oz (not revised downwards) – (10months mining)
I have a number of issues with this… its not aparticularly large deposit in terms of going to the trouble of anunderground mine, it would be significantly more expensive to mine,and have far higher risks associated with it underperforming.. ifthere is dilution in stoping for instance it could significantlyreduce the grade through higher waste tonnage being mined, and thelength taken to process it.
It would /have to be given deepconsideration as to whether this deposit is worth the risk of mining,given (a) it will be revised downwards from wet/dry adjustment (b)will have higher transport costs than if a mill were on site (c) runsmuch higher efficiency risk than open pit and if it goes poorly wecould end up occupying our mill for longer for less profitable ouncesthan planned.

For a starting pointwe should probably view it as an open pit equivelent of 1 to 1.5g/tbut with higher risks

footnote

Reserves: value =zero unless there is a significant material change to gold priceabove cost of mining changes


I should further notethe tonnage being reduced (by whatever ammount from the wet to dryreassessment) would positively impact on the time it takes to processthese ounces.. we have no way of knowing the impactat this point, imjust noting that I didnt reduce the tonnage, but I did give theounces a health haircut… circa 80% recovery to guestimate normalrecovery and potential reduced MRE.


What do we gethere
~ 2 years of reduced production to 18ozKpa at approx1.94g/t (higher grade, higher transport costs).
~ 3 years30kozpa at 1.7 (reasonable grade, higher transport costs).
~ 10months of underground... if it is mined... with a risk of it beingless profitable than the open pit.

~ tenementsexploration

cost?
Royaltyfactored into the above guestimate
Cost of making the depositmine ready from drilling to design … and permitting

2 years of reducedproduction (albeit probably at better margains than what we haveprocessed in the last 2 years)
were there other costs such asreimbursements etc in the second deal?


now ive written it all down, i can go back to bed and get some sleep and not worry about forgetting what was going through my mind