email from a nervous nellie ... , page-6

"The expected output for the 13FY at 100kOz also don't excite us, as we should have achieved this level this year (by running above nameplate capacity. "


The earlier FY12/FY13 production forecasts were based on high-grading Salt Creek and then Maxwell's ore... with a hole to be filled by very significant UG production in later years.

A few months ago CC said that they would be blending the lower grade stock pile with this high grade ore 50/50, reducing head grade to 2.7 gpt but maintaining it for longer, providing more even production... 2.7 is still higher than 2.5 reserve grade but not anywhere near the 3.5 head grades processed in previous quarters.

So do the maths... 1 mtpa at 2.7 and 93% recovery = 81,000 oz. 1.2 mtpa at 2.7 and 93% recovery = 97,000oz. So FY13 production will be somewhere between these two numbers and hopefully the latter if the circuit upgrade is finished by July as anticipated.

Any underground production will be added to the open pit production in FY13... but I find it interesting that the company isn't giving any guidance now on this. Maybe it isn't going so well, or maybe I'm reading too much into it. So why not hold and wait for the CEB results?

Regarding costs, I agree there needs to be more info. As I've been saying, the company hasn't been divulging some of its upfront costs like pre-stripping and underground trial, except to company insiders with rumours being posted here from time to time...

some of these upfront costs will be capitalised and some of them expensed. Either way they need to be paid for out of cash flow or dare I say it, more debt... so I wouldn't read too much into the headline numbers, $650/oz $850/oz etc... they tend to mislead anyway.