Goodbuy CTL, page-11

I've not seen any breakdown in any of the reports about proportion and grade from the two mines - this would be very helpful and I'm not sure why they don't do it. I can only speculate that perhaps its because the union hill grades haven't been great.

Regarding a rights issue. Even if they've somehow sorted the con note situation, and the mine is running profitably I think a rights issue or some kind of shoring up of capital is essential. If they continue to run on a shoestring trying to build up a cash balance they'll likely come unstuck again. If they've got the mine running well and profitably then they still need to do drilling and exploration to try to build up a longer reserve. They need to do that now - as soon as possible - the sooner the better. It will translate directly into investor confidence and improve their valuation - because even if they demonstrate the ability to run with tidy profit margins, the lack of a good reserve will hamper any capitalisation based on those profits. If defining a reserve is too expensive (aka NST's underground mines and some other highly profitable high grade operators) then they'll need sustained quarters of production for the market to trust the valuations instead.

Assuming they're now into decent profitable grades at both mines and most teething problems are solved I'd still prefer to see them well capitalised for growth. They need to be in a position to fund any capex required on things like mine stability, safety, capacity (e.g. like the tailings expenditure already sunk) as well as exploration for growth. i.e. so they can run a well oiled machine designed to grow into the future and not limp along from gold pour to gold pour, skimping on costs trying to meet their commitments.

In spite of the issue of the notes, management have demonstrated they are able to run this mine in my view. If it fails due to grades I'd regard that as beyond their control - and in that case its not a profitable mine and nobody is going to make it work. In that scenario it goes under regardless at some point, everybody loses out, shakes off the loss and moves on and thats the spec gold market.

Still want to see what lies beneath - there could be an equivalent of the Fosterville Swan zone in either mine and it would be happy days indeed if that were to come about!