bounced off 5-year low, page-2

Thanks rayray and Fivetotwelve for your positive posts. It's easy to get caught up in the doom and gloom when a stock is going through a bad period, all the announcements seem to bring further negative news, and the share price is falling through the floor.

We maybe need to remind ourselves that Henty has historically produced above industry average high-grade ore averaging 12.3g/t, and had zones averaging as high as 107g/t, and it's certainly possible that more of these high-grade zones will be found. Last I heard we had five rigs operating at Henty, probably equalling or exceeding the drilling effort when the mine was owned by Goldfields, then Aurion, Placer Dome and Barrick, all of whom ran profitable operations at Henty.

There is still a great deal of highly prospective ground to explore in the Henty/Tullah tenements, and now that the mining team have got a better handle on the geology of the area, and adapted their methods to more efficiently extract the ore, we should get a consistent feed of high-grade ore to the mill at a lower cost.

In the September quarter last year, the reported production cost was $658 per oz, and if we can consistently produce around 45,000 oz per year at around that cost, there will be some very good profits to be made, especially with the gold price heading towards $1,500, even with a high Aussie dollar. The profits will then fund continuing exploration without further depletion of the cash, and in fact the company may be able to reinstate some dividend payments.

My main concern is that until there is some good news from UML to drive the SP higher, we might get swallowed up by a predator who is interested only in stripping the cash. I'm hoping that either the company will get back on track towards sustained profitability and an improving share price, or that we will be taken over at a fair price by a company with a successful track record who will make the most of the UML assets.