azumah update

Hi All,

Just got off the phone from the company and thought I'd share my news. I won't say who I spoke to in case I misunderstood anything they said. Everything I write here is in good faith based on the notes I took during the conversation. If anything is wrong I apologise in advance and please don't hold either myself or the company to anyhting.

Reserves - They are doing more detailed drilling now to convert resources to reserves (50m by 50m and 25m by 25m). They have a geologist just looking after this. As stated in the recent annoucnement it's looking positive for an exention of Kunche and Bepking in a couple of directions which will hopefully result in an increase in resource there as well as reserves.

Resources - They have/are getting a second RC and augor drill rig with a second geologist to start more detailed drilling of the rest of the 90% plus of their tenements. Results should filter in through the year but he said they are hoping/expecting to cross the 2 million ounce resrouce this year. Obviously this could be higher or lower and they arn't promising anything but that's the number I was given.

The Mine - Detailed design will soon be commencing. Obviously it will be a truck operation at this stage. Longest lead time will be the mill (48-50 weeks). I'm not sure this is right as they still need to order the main equipment for the substation, which will be 161kV to 11kV. As an electrical engineer I can tell you that they wouldn't have much of a hope of getting a transformer to do that in Australia in that time frame although they may be able to source this from Asia quicker. A substation of those voltages, depending exactly on how they do it and how much gear goes into it, will cost between 5-9 million I'd guess but could be higher depending on how the mine is set up overall. I got the impression they would not be bearing the cost of the transmission line. Maybe I can do some contract work for Azumah on their substation..haha.

Gold Price prediction - Got no guidance here but it doesn't matter anyway as their plan here is to get into production as fasta as possible.

Financing - They are unsure if they will have to hedge some of their production as it will depend on method of financing. Bascially what I got told was that North American investors prefer equity raisings (dilution but no hedging) while Australian investors prefer debt (no dilution but hedging required). I am wildly bullish on the gold price so I suppose I would grudgingly prefer the equity raising to hardcore hedging.

Well that's all I got. Hope you enjoy it.

Cheers

Twinsen