Ann: Quarterly activities report , page-3

Positives:

- Power availability now sufficient for all site operations

- Standby trailer mounted power generator on site in case of future failure of operating on-site generators

- Diesel powered 200l sec pump on site and commissioning in process including pontoon mounting

- New MD appointed

- Financing completed to plug cash flow hole from delayed operations

- Mining contractor terminated with RED5 retaining some equipment and supplemented by Galeo equipment - looks like they're bringing mining operations in-house: A good thing if competent (look at improvements at NST for example).

- $19m in cash on hand at end of quarter + 1,200 oz Au

- Van Eck now a 7% shareholder

- Gold being sold at spot prices


Negatives:

- 69 kV connection looks like further delays meaning reliance (independence?) of on-site power generation

- Contractor termination wont take effect until late in current Quarter (16/3/13). Possible further availability issues of contractor fleet until change over. E.g. last quarter large excavator(s) only available 37% of time

- Weather related event in mid Jan (400mm rain in 48 hours!) and mill upgrades/ maintenance meant mill off line for 19 days. Will impact current quarter production.

- Operation still not cash flow positive

IMO progress is being made on all fronts of operations and RED has enough cash on hand to allow enough time for the remaining outstanding issues to be overcome.

Steady (but slow) progress being made here.

Cheers
John