Ann: Kharmagtai Open Pit Scoping Study Completed, page-16

Scoping under JORC or PEA under 43-101 never show direct value metrics like NPV as it includes inferred material and estimates aren’t accurate enough. They allow a positive decision to be made to go to next step.
There is some useful information in this on capex and opex but it lacks any sense of a mine plan ( tonnes and grade ) to allow any sense of calculation of cash flow and others show this to allow the market to draw own conclusions. There is a reason for this and that is there is simply not enough grade to have any chance of making a return on the capex. The next step is not just infilling inferred to indicated etc; that is useless and saying that is silly, a lot of exploration success is needed to make this a goer. The results are also clearly put out by geos. No engineers involved. More granular comments:
- I fear much of precious drilling in many areas has been wasted.
- the original open cut resource which was 980m deep was a joke and this study shows that. 50 % of the resource is included in the scoping study down to 380m from memory. Pits for reporting of resources can be done at much higher commodity prices but the diff between 980 m and 380m is ridiculous. Much of the reported OC resource is an underground with all that development required. Really poor judgement on reporting the resource.
- note the 2008 met tests that raise red flags with pyrite and oxide. Also didnt the company do more recent work than this - maybe in there and I missed. Why did we not know about the 2008 work ?
Its always a balance but this project was not really ready for a scoping study perhaps. All we see is capex and low grades now rather than sexy exploration intercepts.
The gold caps need to come in. But with capital raise coming, we are at a tough tough spot.