Ann: Update on Financing and Production, page-68

Below is my email to management. Please feel free to copy and email to [email protected] if you feel like I do.

I am very happy to see good progress on the refinancing front and I understand the difficulties your company faces in the field when introducing a new technology but you need to know that your communication with shareholders has no such excuses. It is my opinion that most of your ASX announcements leave much to be desired. Last weeks announcement appeared to be short of one page. The page with an explanation for the significant fall in production and a description of what might be happening next March was missing.
More specifically: On the 1/9/14 you informed the market that the plant would move to 100% throughput. On 18/9/14 you informed the market that the plant was now at 100% throughput.
On 10/10/14 you informed the market that the plant was now expected to produce only 850 oz of gold equivalent per week for the next two quarters. This represents a considerable drop in production which you have made no attempt to explain. If the plant is still at 100% throughput it would appear that there has been quite a dramatic reduction in the recovery rate to somewhere near 41.25% (down 25%), as per the following calculation:
   
850 Au Equiv = Au 765oz + Ag 6,324oz
100% throughput = 200,000T/13weeks = 15,384
Average grade of the deposit is 3.75
41.25% Recovery

Gold production/week: 15,384 x 3.75 x 0.4125/31.1 = 765 oz per week

Silver production is Au x 8.27: 765 x 8.27 = 6,327 oz per week


Alternatively, if the recovery rate has not fallen and is still somewhere in the vicinity of 55% then there has obviously been a dramatic fall in the throughput rate to approximately 11,540 T/week or 75% throughput, as shown by the calculation below:

850 Au Equiv = Au 765oz + Ag 6,324oz
75% throughput = 200,000T x 55% /13 = 11,540
Average grade of the deposit is 3.75
55% Recovery

Au Production/week:   11,540 x 3.75 x 0.55/31.1 = 765 oz per week

Silver production is Au x 8.27:    765 x 8.27 =  6,327 oz per week

It is obvious because of the fall in production that either the throughput or the recovery rate are down by approximately 25% (or possibly they are both down 12.5%). Undoubtedly you have a legal obligation to report such information and you are absolutely right if you think I am unimpressed that your last announcement did not do this. An explanation as to the cause would also be good along with some convincing reason as to why the production rate is likely to jump by 15% in March.

Please comply with your legal obligation promptly.