dear mr. taig, page-31

Some good posts in here - I like your questions f&b and also replies from CW, Pinto & Kentwang.

Firstly, I am onboard with Focus' strategy to be a +500k Oz producer. I believe they have the existing ground position to support this strategy, so it is just a matter of timing to get our best bang for buck. I won't go into the 51% side of things in this post.

Focus would have run some desktop NPV/IRR/Payback scenarios for the LOM plan and this $227M would be supporting this. This option would be preferred financially over organic options or other cash raisings (say $40M). Perhaps some more information on this plan will give a better understanding to all.

So lets say we have 500k Oz per year. What could this look like and what would we have to do to acheive this?

1 3MH upgrade to 1.8MtPa (~140k Oz)
A study has been completed on this. Say $25M & 1yr.

2 TI & Mount Processing Mill 2MtPa (~160k Oz)
There would be a couple of options for this. Relocate barnicoat or other mill in 1yr for $30M. Or build new say $100M & 2 yrs. 1.5yrs to define resource & approvals.

3 Barnicoat 1.2MtPa (~90k Oz)& GSM OPA 2.4MtPa (~110k Oz)
$25M refurb

So there is about $80M in mill refurbishments. Say we spend $60M drilling TI for 2Moz, Coolgardie/Neapean $30M, Laverton $30M. So there is $200M and you probably have less than 2yr project paybacks which sets up the operation for 10 years +. As CW mentioned, Neapean itself may have potential to cover the upfront capital of all of this.

Acquisition wise I don't think we need anyone's tenements - we have good ground position which just needs some drilling as Pinto has mentioned. We need some processing capacity and there are a lot of options here - refurbish, new or purchase. There is still the Laverton OPA which is up in the air and I am keen to hear some direction there.

One company I have been impressed with is Regis' ability to undertake projects. Have a look at the link below on their Garden Well mill. $110M capital cost and a project payback of 7 months!!

http://www.regisresources.com.au/Duketon/garden-well.html


I would be keen to hear any other options people see here. These are just conceptual numbers.

LennyQUT