financials

Hello a very limited post here, and I note, I am not an accountant so I have been looking carefully, asking questions and not jumping to conclusions. I would hate to be an armchair accountant and base decisions on partial understanding as that would be 'unfortunate'.

I a non-holder picking numbers out in isolation to benefit my short position, wish for the stock SP to fall, wishing to be made 'right' by the market - or any other potentially perceived agenda.

The financials have to be cut off in a point in time which in this case was June 30 2012. At the time there was a Laverton campaign in progress. Now this has always been a cash flow situation to manage and why Barnicoat would be such a value to the Group. Ongoing production at Barnicoat would smooth the cash flows to weekly income against weekly costs and free up operational cash requirements substantially.

One poster picked one figure in isolation and that was the net current asset deficiency of $33,985,000
...he of course failed to mention: (excluding non-current restricted cash of $12,885,000 associated with environmental bonds and security deposits). This may be restricted however it is standard to report it separately yet it is an asset. This is not the only unprofessional oversight either there is war worst.

Far more importantly; critically he also failed to mention the campaign and the mining and transport of 500,000+ tonnes of ore (+pre-strip) that has been trucked to the ROM pad (Run Of Mine - the storage area) at the BGSM - at very significant cost. I am sorry but this is view typical of a cursory look by somebody of limited actual interest in the story behind the numbers - poor DD particularly interesting from somebody looking to run the company down.

A close examination is required to pull out the truth but you have to want it in the first place:

The costs at Laverton are mainly associated with development, blast, mining, drilling (grade control etc), handling and transport. The FIFO of staff will also be in these figures -ahead of (before) income after the end of the campaign.

They also fail to mention FML are turning around a DISTRESSED ASSET, as such there will be lingering payables which are forecasted to be met within agreed
terms by operational cash flows and existing cash resources.

The neglectful point made was misinformation and deception (perhaps unintentional) IMO. The fact is the income of

approximately $37,500,000

...had not come back at the cut off date for this report and would have been received since then after the campaign at the BGSM.

NOTE: CRE were unable to manage these cash flow fluctuations and raised significant capital from DB ahead of a once in 20 year weather event and, after repairs were again left unable to manage this cash flow issue. FML to their credit have done with great skill and care a point that would not have been missed by sophisticate investors, miners and business specialists like SGG.

There is more to the story:

The other glaring oversight was the development - a very significant pre-strip had been undertaken at Apollo (+ road diversion) and more investment in Coolgardie. This cost was also in this financial year and not all the ROI by FML has been realized in this report. Development costs of only $2M for the September quarter can be viewed as a pause in this ongoing factor and the payback period is this quarter - after the cut off date of the financial report. This will consolidate the cash position ahead of the next step forward by your highly competent BOD and CFO.

My corporate accountant adviser tells me he saw nothing untoward in any 'games being played' from the notes in the report. I will keep the rest of that discussion close to my chest. FML have invested cash flows back into the ground position and turning around CRE assets for our future.

This is clear from the FML comment:

"The opening cash balance of $30,709,000 and the operating cash flow of $56,006,000 during the year (2011: $30,754,000)
was used for developing the mine operations, exploration and purchase of property, plant and equipment, all of
which will provide the Group with future economic benefits."

This is my honest DD shared for your benefit readers take it or leave it. I picked up the phone and confirmed this as well. Careful who you listen to and who you let influence you as some have hidden agendas. I support FML, they are an advertiser and I am long FML shares in a number of different accounts.

That has NOTHING to do with the facts presented here. A huge injection of capital is just what we need to go on to greater things I think Derham and MMM were spot on. Do not let emotion cloud your investment decisions; it is the enemy of logic.

Cheers,
CW
DYOR&DD