boom !, page-17

re: !!!!! sb & b2 see you here in about 3 weeks!!! B2 you said over on the CSE board.

If you read the last report carefully they talk about a 1,500,000 ton reserve and yet now they only have a resource of 2.8 MT at 14.1%. =394,800 Tons . There seems quite a difference so what do you read the Reserve / resourse to be , Is the 1,500,000 a reserve of Zinc ?
Also there is nearly a 2 year lead time and Zinc has been in the depts of around US $0. 30 a lb for years and could go there again. Just some comments VB .
I will be very interested for you to remove the scales from my eyes so to speak .
Best wishes to you B2"

To answer your questions:
Fistly Zinc is at 0.60c US per lb. It has been in a pretty strong up trend since June 03, and if you believe it is going to 0.30 cents a pound you better get out of all resource stocks now.

Now to this reserve/resource business.

At present they have 2.8 million tonnes of resources @ 14% zince equivalent. In the process of the feasability their first scoping study was to see if it was worth proceeding to a feasability by doing a quick study on processing an indicated resource of 1.5 MT at 300,000 tpa to generate a cash surplus of 47 m over 5 years after all capital.

They have just completed a pre-feasability which shows of the resource at present 860,000 tonnes can be classified as reserve grading about 15% Zn equivalent.

next step will be to infill drill part of the 2.8 million tonnes resource to up the reserve tonnes to 1.5 million tonnes. And at that stage they will look for finnace.

Then they have depth extensions, a small on strike extension, the hanging wall load...these are all low risk and should double the resource. And possible take the overall reserves- up. Finally there is the potential at jettner deeps which is only a geophys anomaly at present but the size of the response could indicate another body the same size as Rankine.

It is fairly typical for companies to do a pre-feas and then an internal feasability then a final one or two feasabilities which examine a number of scenario's. It is an iterative process whereby costs are worked out. then you can see what you can mine. then you optimise costs again and then look at how that changes reserves again until a final +/- 5-10% figure for the deposit is arrived at.

i hope that helps