conversation with jozsef and jv option, page-6

Ivory,

The reason the price is bargain basement IMO is due to know one factor but a number:

- overall market conditions for dirt kickers are not great atm, with many people arguing the environment is the worst it has been for them since the GFC,

- alluvial mine not meeting expectations in terms of throughput and delivery, and

- cash burn, without doubt this is the major reason and more specifically the failure to communicate the cash position properly to RBS and other key investors at the time of the last raising.

At the time of the last capital raising (circa $7m if I recall) these key parties all felt the company would have atleast 6 months capital, however in mid March the company presented to the parties above and informed them they needed capital in the not to distant future, this as mention by Miljet was followed by a massive self of by RBS retail brokers with other investors then following. Until such time as the market is comfortable with the cash burn of the company then the price will not rise, especially given the current overall market conditions.

The mistake with the advantage of hindsight was a combination of a) not obtaining an additional $2m at the time of the last capital raising and b) not informing major investors that $7m raised did not mean the company would then have $7m. If you review the December half year accounts you will realise that once they paid creditors and loan advances back that they had more like $5m after the capital raising.

Finally your throw away line re the major shareholder, this is commonly thrown out as an excuse in small caps by people as a reason for a depressed share price, when the reality is the board of directors and senior management are the ones who should and must be accountable to the shareholders, and the key is they now execute the drilling program in a cost effective and timely manner.

We now know where the gold is and if they were to say deliver 1m oz in the next year, being 4 to 5 years from listing date that would be an excellent result.