Ann: Quarterly Activities Report, page-26

The Qtly report was not very good for my money. 27k ozs of gold sold from Gold in Circuit(GIC), 16.5k ozs of which was "finished goods".........this hasn't been done before and was effectively using the company's "emergency buffer" to achieve an already reduced forecast. I don't think this sets the company up for next qtr very well at all. The financials are difficult to read when you try to factor in the additional $46M of revenue from the liquidated inventory that had little if any cost associated with it - where did it all go?........It would seem the company had a year end target to hit and pulled out all the stops to achieve it.

The mine development would also seem to have fallen behind schedule. One of the charts JW liked to champion in past qtrs showing development progress against budget has been dropped for this report. Last qtrs report showed actual progress slowing and starting to fall below plan, it also showed that development for this qtr was expected to be a lot higher......We are now told this qtr that development has slowed compared to last qtr and the relevant chart has been removed that would show us how much behind plan the project now is.....

I also have concerns about the Ravenswood project. Despite the attempt to make the project look better after all the work that has been done, it looks to me as it has gone backwards. AISC has gone down but this is due to the move to owner operator.... you would expect this, but the big increase in capital cost appears to offset most of the AISC benefit. Production over the 13 years has declined and the profile is weighted to the back years of the project, therefore with the added upfront capex I would be very surprised if the IRR of the project has improved........It would appear to be a project waiting for a higher gold price.

I have stated before I don't like the $20M investment in Orca, and it is more concerning at a time when the company would appear to be stretched financially.....I don't like Orca's Chairman as I believe he lacks integrity and has heavily and consistently mislead the shareholders of BDR where he has just been sacked as CEO.......I hope this unplanned investment doesn't turn out to be too good to be true.

Enough concern for me to change my short term view.