Ann: Appendix 4E and Annual Financial Statements, page-4

After reading the financial report a second time, page 41 gives the following details of the impairment:

"The recoverable amount of the mining property has been determined by a value-in-use calculation, and during the
year the company recognised an impairment amounting to $17,275,640. The impairment loss has arisen due to
falling metal prices as well as now making payments in respect of the Metal Purchase Agreement disclosed in note
19. Management believe that the revised carrying value is fully recoverable. As the CIL plant was not completed at
the year-end, the additional gold and silver recoveries from the CIL plant are not included within the value-in-use
calculation."

So falling metal prices and the financing arrangements result in $17M impairment charge which management feel is fully recoverable.

My thought is that as production increases with the improvements to the existing plant circuits and the new CIL plant, the profits from the more efficient operation will increase the value in use. If metal prices also improve it will be an added bonus.