Ann: Strategic Alliance and Capital Injection, page-5

I don't think WGX is directly paying a fee but rather the fee is coming out of 10% of new capital issued to GEAR. It's a capital raise at 1.88 a premium on the weighted average.

This raises a very good question though - obviously the market hasn't liked this as this is another let down by management - but the question is whether we, the shareholders, let management get off the hook a little too easy?

On the 18th September, the company advised that there adequate capital and incoming cash-flows t0 fund working capital and expansion required to meet it's guidance. The company has not advised of any material changes to this, then why the need to raise the capital? What materially changed that needed capital urgently for working capital for WGX and ACM.

I suspect the guidance of 310 to 340 ounces is at risk now - and the market hasn't been advised!!!!! I could sense it as the first quarter output came in at 66,000 ounces. Even on on a conservative production of 310 then the average run rate needed for the next 3 quarters needs to be 81,000 ounces. But the last quarter will need to be higher as production needs to be moving towards 100,000 ounces to meet guidance of the following year of 380 to 420. (note these guidance have re-iterated to the market twice). But if we were going to through more money to meet these guidance and then how does that change cost profile?

Additional to this we paid $30m in shares and cash for a contracting company, with no advice on how this will contribute to reduction in costs - it doesn't seem like it may not have been profitable and now the CR is supposed to assist it with working capital????

It would be better if management was transparent with information around guidance and material changes to forecasted eps, and stop making speculative investments unless their is clear understanding of what internal rate of return is generated and payback is going to be so we know how it's EBITDA accretive .

I have the feeling that PC is making company bigger by increasing the equity base (by diluting existing shareholders) as opposed to expanding the productivity of the underlying business.

#Frustrating