much unloved but a great prospect

So far the performance of this company has been quite disappointing. Very little profit to be seen for the gold it has mined. This seems set to change given the rise in POG and the size of the resource amenable to an underground operation.

This one has the potential for significant upsied imhop

Here's the Director's report from the annual...


Dear Shareholder
The past year has been very challenging for your Company with a very
productive first half followed by the announcement in the second half that
Areva were looking at divesting their interest in the Mungari East project.
Throughout the year the Frog’s Leg open pit has continued to produce more
gold than budgeted though this was at a higher tonnage and lower grade.
Mining productivity and mining cost were impacted by poor contractor
performance , wet weather and industry wide increases in mining costs.
The most significant achievement for your Company was the 25% increase in
resource ounces through the modest program extensional drilling completed
in the second half of 2004. A total of nine infill and extensional holes produced
some of the best intersections recorded at Frog’s Leg including an impressive
32m @ 12.94g/t Au.
Early in 2005 three additional extensional holes were completed. All twelve
holes from the two programs intersected economic mineralisation increasing
the strike length of the Mist and Rocket Lodes and hinting at the exciting
upside well beyond the 933,000 ounce inventory that currently exists at Frog’s
Leg. Both the Mist and Rocket lodes that represent the underground resource
are open along strike to the north and south and at depth in excess of 400m
with a potential to grow the resource in excess of 1.5 million ounces through
drilling to 600m vertical and strike extent drilling.
The potential sale of the Areva Group’s Australian gold business held by
Mines and Resources Australia (“MRA”), was confirmed with the
commencement of a two stage bid process in September 2005.
Unfortunately, the drawn out sale process has interrupted ongoing
exploration, feasibility studies and development at Frog’s Leg. Dioro has
invested considerable time and funds to determine the value of MRA to your
Company and is utilising this information during the sale process. The
Company was advised late in September that it was invited to participate in
the final phase of the sale process.
You can expect a very exciting year once the sale process has been
completed irrespective of the successful bidder and owner of the 51% of the
Mungari East joint venture. The transition period has been a challenging one
for your Company however it is likely that the new project operators, Dioro or
some other party, will unlock the true resource and underground production
potential in the short to medium term.
On behalf of the Board of Directors I would like to thank our shareholders for
their ongoing support, which has placed the Company in a strong position for
growth. I would also like to thank the staff, consultants and contractors
involved in advancing the projects through the past year.