commissioning of plant, page-26

Firstly, in regards to extraction of gold from tailing dam I make the following comments:

Though cannot be sure, my memory recalls a new process developed in extracting gold and other precious metals from tailings at Mt Morgan in Qld. It was widely announced in the media as it had the potential of producing lots of gold, created new jobs, was relatively cheap, environmentally very sound and commercially profitable.

Mt Morgan is a very old mine that extracted lots of gold in the past over many decades. Huge amounts of gold, silver, etc., together with chemicals used in extracting the gold over the history of the mine (probably 10 -20% of resource that couldn't be extracted by the old process) all went into the tailings dam, in effect a huge open cut hole in the ground in the middle of Mt Isa township. Now through a new process further production of gold, silver and expensive chemicals used over the many generations could be recovered.

Can anyone with better memory than mine recall anything about this new process and whether it has been successful.

Secondly, these comments continue my doubts as to the credibility of our Directors regarding the timing and substance of this last CR.

I note in Zia's post the appointment of Mr Roger Bannister as the project manager in 2009. With some 25 years extensive experience all would think he knows his job and how to get things done. But has he done his job and has he kept up to date with most modern processes???????

Surely, IMHO, a bigger and better crushing plant should have been clearly identified during the due diligence process well before the entire plant was attempted to be re-commissioned and made operational. If it was, why was its not 'announced' to the ASX and shareholders alike that there were problems with the size of the crushing plant and possible difficulties in extraction of product from tailings. IF TRUE, is this not a breach of the law and ASX rules?

To make announcements that the plant will soon be commissioned and gold will be poured soon thereafter is well short of full and honest disclosure. They left out significant information that they must have known was relevant to the market and MUST have been disclosed.

Important information such as this would have made a difference in the timing of my recent investment. Those with this information (significant investors and under-writer) no doubt have (or will) made a motsa whilst a lot of us recent holders, and old holders who were not aware, have seen severe retraction of their portfolio.

Others have voiced their praise of these directors but I am yet to be convinced as to their management skills in acting fairly and in the interest of all shareholders. Anyone with a grain of intelligence would have foreseen the share price to collapse to the initial 3.3 cents and again to the 2.5 cents in this CR debacle.

Forewarned holders sell at 4+ and buy back at 2.5+ with considerable profit in money or extra shares. (This is the mess that needs to be fully explained by Directors or explored by the relevant authorities.)

and lastly:

Have not yet received my entitlement documents as yet. Obviously there seems to be some confusion as to the advantage of taking up new shares as per the CR by existing holders. Certainly, this confusion will benefit the under writer which will take up a possibly increased substantial holding at rock bottom price of 2.5 cents for shares. At least we have just over 2 weeks to buy them. I retain the same percentage of the company I initially owned for another thousand dollars or so.

Begs the question of why didn't we just borrow the money from Bank of America or elsewhere. 10% dilution of company to raise $6m+, after paying under writer several hundred thousand dollars for virtually a totally risk free CR.

How many ounces of gold to pay say 10% interest on $6m loan .... no, it cannot be less than 600 ounces @ $1000 per oz per year and 6600 ounces of gold and pay off the interest and principle in the first year. Were we not aiming at producing approximately 50-60,000 ounces per year in the next year or two?

Due diligence sounds good.... but if done by dills or by persons who have a different agenda...well!!!!!!!!

I will continue holding because I do see the enormous potential down the track of this exploration and hopefully producing company. I will also buy into the CR. It's just a shame the Directors didn't see the necessity of fair dealings for all. Perhaps they were bullied or trapped in a corner but by their actions so shall they reap: IMO, their credibility is now seriously in question.

Bernie