THe situation does not look good. From the quarterly activities...

THe situation does not look good. From the quarterly activities report, the head grades are lower than expected, in pit tonnage lower than expected (ie. less gold than expected with the double whammy of less tonnes and lower grade). Tough to make money on 1 g/t dirt unless it is soft and you have no waste to move - not so here.

Even more ominous is the quarterly financial statement wherein despite a raising during the quarter, they had $2.4m of outgoings and $1.07 cash balance. Note that the operation will have accrued creditor payments (liabilities) that will not show up on the cash balance but on the flip side may have gold-in-circuit and bullion (assets) not reporting there either. Granted that there was $3.5m repayments to Westpac but that looks like the bank has put the hard word on them for accelerated debt repayment in light of the poor operating performance.

With another $6.5m in remaining debt and a hedge book 'in the money' the temptation for their bankers must be to force the sale of the hedge book to cover the debt as the likelyhood of the operational performance going even more pear-shaped will have the bankers lying awake at night. The crazy thing about an 'in the money' hedge book is that, in this situation a rising gold price actually increases the risk of the company being put under because as the gold price rises, the value of the hedge book decreases and may not be of suffient value (as a liquid asset) to cover the liabilities (bank debt). Banks don't like that type of risk, especially when an operation is underperforming.

Do your own research but all the above in conjunction with the trading halt does not look good - my feeling is that either they are in a halt while they get another injection of funds, or it is terminal.