Ann: Development Progress - Lindi Jumbo Mine, page-113

It is extraordinary that you guys together with Andrew and Mike don't understand or acknowledge the risk of underestimating the dilution. Andrew made reference to Gemcorp willing to lend $20 million based on the project construction being well advanced on the back of equity. He made reference to the intended small scale of the operation and it had to be that way in order for shareholders to be able to afford to get the project up and running. So he and Alan Mulligan went off to Tanzania to find a high grade orebody which was necessary with such a small plant lacking economy's of scale. Did they find a high grade orebody? The answer is NO. Lindi has a resource grade of 10.8 percent. About 13 percent of the Lindi orebody has grades of 17.9. The small low capex plant would lose money at 10.8 percent head grade so the idea of high grading the orebody was conceived. That's fair enough but you need to be realistic about dilution and 5 percent is unrealistic. What has been conceived here appears to be reverse engineering the reserve grade incorporating dilution based on a shoestring budget.