david harley must go, page-9

Guys,

If Gunson has any chance to get Coburn off the ground it would be to follow the same path of Image Resources, who published this in their quarterly from yesterday.

Image is implementing the strategy of initially developing the high grade
Boonanarring resources to produce HMC for sale or toll treatment. This option is not only attractive in terms of project economics, but will provide a quicker path to production at lower risk, with a significantly lower up-front capital requirement than would be the case if a Dry Mill is constructed initially. This initial low estimated capital cost project would then provide the operating platform and cash flow for the staged development of parallel mining operations.

GUN could buy an off the shelf concentrator out of South Africa for $4m, jazz it up, get all the other approvals and infrastructure in place for under $15m, and the shareholders could fund it via cap raisings and a bit of bank debt.

Alright it's not going to be the $1 share that you all crave, but it could get to 20c and be a nice little earner have a mine life of about 1,000 years.

I know you guys have cringed when I have said this, but the grade could be a bit of an issue, but with some hard work, keeping costs down and not having to worry about dry milling, a good concentrate could be produced. There are a whole lot of Iluka people that got flicked from Eneabba two months ago looking for work, and a $6-8m concentrator plant would only need 10-15 people on site, so a staff capex per year would probably only be $1.5m with all the super and other contributions.

If you guys get to the EGM, ask the board have they thought about just wet milling a concentrate, throwing it on a boat and sending it up to the chinese to separate. There are a heap of mills up there that do just this. I'm guessing the board and management would probably be thinking "hey we want $1m salaries a plant that size won't do it", but isn't having something better than nothing? You could also enlarge it - easily.

There are a couple of small unlisted private sand players around Gingin that have formed a little co-op and send a boat load up two to three times a year out of Fremantle. When you look at their operations, it's like looking at the little gold prospectors from years gone by. They have a bobcat, trommel (a gigantic mixer, about 5 times a concrete mixer) and 10 cyclones (spirals), all using basic unfiltered bore water. (It's just so rough, it makes me laugh).

.....but the interesting part is they make a bloody squillion out of it.

Gunson could be the company between them and a fully fledged producer, then you would have no need to deal with all the mineral sand tyre kickers that want a cut of your project.

Pep