Ann: FML Sept. Quarterly Activities Report and 5B, page-2

re: Ann: FML Sept. Quarterly Activities Repor... Well I have read it and I do not see anything wrong here at all that would not have me buying more shares even at 5c. For me this confirms that the only thing weighing down the price is the Shandong offer. Even with the lowest quarterly gold price we are positive cash flow. With the forecast gold price increase we would be very positive and have plenty for exploration and further development, much better prospects than our peers.

Cash costs were up on lower grades, and a lot extra striping. However look at the last quarterly the grades were that low and see what improvements we have made. Some lower grades expected the next quarterly too, but no impact on net production they say, also more cost reductions. After that forecast improvements in quarterly figures. Factor in the gold price forecasts for 2013 and check out my other post to see what sort of cash we could be raking in (here.) As far as I am concerned they can spend all that cash in development and exploration, with so much potential to gain.

Seems a perfectly reasonable scenario to fund development from cashflow from now, maybe it takes us an extra year, but in the long term we keep it all ourselves. The only way an extra $250M will be of net benefit, other than speeding up development, is to buy us a 100% increase in reserves from another company. Look around and you will see no companies in Australia that are selling those kind of reserves for that price other than us!

Anyhow that argument is made elsewhere, but all in all it is a good quarterly report, showing we can do well even in a quarter with poorer grades and higher strip. Not the sort of quarterly forecasting an extreme need for cash. It really cements in the excellent job that has been done since we acquired CRE.