Ann: Quarterly Activities Report, page-19

Solid result given the headwinds of hedging and stripping.

$35 million net cash but before $9 million in transaction costs for the merger.

The key figure in the table below is 0.54g/t from the open pit and the lower amount of ore mined which is down almost 30%. Combined, this resulted in lower open pit gold mined of circa 20,000 ounces than the prior two quarters. While overall milled ounces were only 5,000 ounces lower than the previous quarter it does show that when KOTH starts to hit its straps with higher grade and tonnage and lower stripping another 10,000 ounces a quarter isn't out of the question. This would equate to an extra 40 million cash per quarter at current prices which added to the cost of the hedges when they roll out will also add another $40 million plus per quarter. Still 15 months to go but the upside will be substantial in due course. The 200,000 ounces in hedging is still immaterial to the long-term upside that comes with the remaining 2 million ounces at KOTH. Not to mention further discoveries that are bound to happen.

Mt Monger and Deflector were as expected. Nothing special to note but let's hope that drill hit 500 meters away at Deflector is the start of rewarding extensions to Deflector. I would still like to see information on why underground mining at Cock Eyed Bob or Maxwells can't be resumed in order to lift grade at Mt Monger.

It will be a slow grind for a while to come. I'm not convinced the churning has anything to do with performance. WGX only made $29 million in cash and it is up almost 50% despite rarely outperforming. RMS is doing well but is facing a capital cliff with the run off at Mt Edna. Hard to see how VAU isn't being lined up to do more corporate acquisitions just going on the share price. It has an EV of $2 billion - that values it's known reserves at $700 an ounce which is obscene not to mention the almost 9 million ounces in measured and indicated resources.

GMD shareholders should be very happy if a merger were to take place as they would get access to soon to be $600 million in cash and a massive mill that could grind Tower Hill ore very cheaply.

The argument about whether or not the stock should be trading at 45 cents is laughable. Even at 60 cents that would only value the reserves at $1000 an ounce (or a gold price of $3500-$3700) when margins are circa $1,500.

If prices stay above $4,000 for the remainder of the quarter VAU pull in closer to $60-70 million next quarter given around 60,000 ounces per quarter is still unhedged.

So it's certainly not all doom and gloom in terms of operations. With gold at these prices VAU is well undervalued.

Have a good weekend. Any buying below 40 cents is good buying.

GLTA/IMHO