Ann: Quarterly Activities Report, page-15

Agree with how you’ve interpreted it. If the feasibility study isn’t based on reserves then it really wouldn’t be worth publishing. Under the JORC code a feasibility study is a requirement for the declaration of reserves. The key thing will be the mining studies and how they can control underground dilution. Importantly the reserve grade will have to adjust for dilution whereas a resource does not.

If you look at a narrow vein deposit like MML has at Co-O the resource grade is 10g/t but the reserve grade is 6.8g/t. They also use a heap of manual labour in the Phillipines and that is unlikely to be possible in Australia. The indicated resource ounces for these narrow deposits also tend to have lower initial conversion from indicated resources and reserves. I say initial because they do eventually convert them but only as the mine advances (although I assume dependent on the ore body geometry). Medusa has had 3 years of reserves every year for the last 6 years for example.

SLR’s Daisy deposit is another one. Resource grade 20g/t but reserve grade is 9g/t. Has had 1-2 years of reserves since it started many years ago.