a sad outcome, page-26

Ok, I'll try this again as my last post contained one line of incorrect information.

Macros, RMS had $99m at the start of the quarter but only had $90m at the end of the quarter. That's a FACT! OBVIOUSLY, RMS are going through a expansion phase with Mt Magnet and therefore are spending more.

Before I go on, if RMS released a decent financial report each quarter it would help investors break down costs and expenditure. They should release a Appendix 5B. It's impossible to know how much is spent on exploration or Mt magnet development etc etc.

Regarding Wattle Dam. There is very little talk on the current problems at WD on HC. She'll be right mate approach? IMO alarm bells are ringing and the CR was the kicker.

The real story about tonnes "mined", not milled in the September quarter is a worry. Considering at the end of the June quarterly 22,500 tonnes of high grade ore was stockpiled for treatment that yielded around 18g/t. Take into account that non Wattle Dam sources produced 11,090 tonnes at 6.8g/t for 2,415.

RMS blended some stockpile ore and the lower 10g/t to get the final grade of 14g/t.

Here are a few quotes:

"Increased ground support measures have been found to be required in Block
D development levels and this will delay milling of Block D stoping ore until January."

Where are RMS sourcing ore from this current quarter?

Also worrying, are these statements:


"In general, visible gold occurrences in these levels were less
frequent than in the upper mine. Mill grades returned were relatively low, averaging 4.5 g/t."

Regarding exploration BELOW block D, I find these a worry:

"Drilling has generally failed to identify strong lode material. No significant visible gold or
assays have been seen to date. Although some lode alteration is present, it is mostly weak."

IMO Wattle Dam is on a fast decline. While it was a fantastic mine, cracks are appearing, hence RMS moving onto DRM and upgrading Mt Magnet.

Macros, you're like a pilot in turbulance trying to "calm" the passengers. Wattle Dam produced at over 20g/t for the 2010/11 FY and in the last quarter, ore production dropped to 10g/t. That is a fundamental problem and not some "short term" issue. RMS has said themselves that grades are dropping! While I do believe the will achieve better than the current 4.5g/t, I do think the 20g/t days are over. This will obviously have an effect on cash costs and cash flows.

The cash raising is for a more "aggressive development" of Mt Magnet and "asset level acquisitions". Does Aggressive development mean "development blow-out"?

If RMS were planning some kind of acquisition or take-over, it would be best for RMS to act first, then ask for cash later. I wouldn't be laying my cash down with such "air-fairy" announcements.

In my experience bad news is usually followed by more bad news. I REPEAT, I'm not saying RMS will not find more gold at WD, but if the next drill campaign fails, how will the market react?

I'm not sold on Mt Magnet. Do you ever wonder why a large gold mining comany would sell a 3 million ounces resource for only $40m?

Just a few of my jumbled thoughts. Have a nice flight.