Ann: Proceeding with the Development of Lorena Gold Project, page-24

Gents,

I am not sure if everyone is working off the same numbers but this is how I see it. I may be wrong.

Gold is currently around $US1,100. A75c to $US1 maybe even lower. That makes gold A$1,466 / ounce.

From my understanding the original MAR/BCD deal was that all up costs, including BCD was A$900 an ounce. Thus making $566 / ounce profit which originally would be 50/50 MAR/BCD, giving MAR a profit of $283/ounce.

For estimated 30,000 ounce of gold per year = MAR profit of $8.49 million profit.

Do the same numbers at gold at US$1,000/ounce and same exchange rate annual profit is still $6.5 million. Remember also MAR has some exploration tax free credits of I think 2 - 3 million that can be offset against initial profit.

Now there maybe a gold concentrate premium etc. but I think it is still a profitable project, but it has to get going and I am going to poke them shortly to see if I can stir the pot a bit more. I am still concerned about the new deal not being the best deal. But maybe the deal is now MAR 57% and BCD 43% but MAR will have to pay MKS some interest costs to finish the plant.

The other possible cost factor is that whilst the falling $A is good for selling gold in $US terms, it does make it more expensive to import chemical reagents that are generally used in the gold concentrate production as most come from China and are sold in $US terms.

Just my view of things.

Griff