Ann: High Grade Results and Resource Review Red October, page-4

At the start of mining of Red October, the expectation was the first 7 month phase would yield 10000 oz at an AISC of $1300 per oz.
Expected profit of $4m based on a gold price of $1750 per oz.

Theoretically with gold still above $2400 per oz, Red October should be a money pit, based on the initial metrics the company used to start the second stage of mining. An AISC of $1300 would yield a profit of $1100 per oz. But so far the costs have been far too high.

The m/c of MAT is low compared to most other small explorers, but the mining side of the company has eroded confidence. Take NXM as an example. They have 2 deposits (Walbrook and Pinacles) of about the same size combined as Red October but of a lower grade. Their m/c is about $32m.

MAT has the Red October resource of 173koz at 5.8gpt plus another 340koz at Lake Carey. Current m/c is $30m

Plenty of upside here if Red October can prove to be a profitable venture. Money is being spent to make it viable going forward so let's hope in future months the results show it was worth the pain. At least the investment in BNR has increased about 3 fold in the last year.

To me MAT is getting into 'buy' territory based on their resources. A reduction in the Red October AISC to even $2000 per oz will see the mine hitting the initial profit margin of $400 per oz. The only difference then will be the AISC and gold price would both be $700 per oz above projections.

With many other explorers bringing out good drill results, it's hard to attract any interest in a small miner with high mining costs even when they themselves announce good drill results.