Ann: Removal from Official List, page-22

The 'apparent' price disparity is likely based on a number of factors.

First being they are not paid 100% on shipment, some percentage comes in at a later date.
Secondly, Some concentrate will no doubt have been shipped and invoiced in December but no payment yet received.
Finally, there are multiple assays typically done on any concentrate on its way to the smelter...all parties have to get to final agreement on those assay values.

In short, next quarterly would show a more representative number because these 'missing' monies will have shown up. However, even then, production volumes will have ramped up and the last month of next quarter will still leave money owing to MYL in the usual course of events. Once w eget to steady state production rates and if the Ni price was steady we would start to see far more accurate representations in the cash flow reports.


quoted from the Q:

"While three full months of operating costs were expended during the Decemberquarter, Mallee only started to receive sales revenue from the third week ofOctober"

Also,


"• Logistical teething problems meant less concentrate was trucked and thereforeeligible for advance payment during the quarter. These problems have beenrectified.
• $2.5 M. of non-recurring start-up cost was expended during this period. Thisexpenditure is included in 1.2(b) of the Appendix 5B.
• Timing differences resulted in no revenue being received in the period for nickelcobalt stockpiles on hand at the end of the period, however operating costs relatingto this product were expended during the period."

All these points speak to the AISC being currently higher than we can expect longerterm.