3. Review of OperationsBullant Gold MineIn the half-year to 31...

3. Review of Operations
Bullant Gold Mine
In the half-year to 31 December 2011, the Company progressed development and mining activities at its flagship Bullant
Underground Gold Mine in the Kalgoorlie goldfields region, in Western Australia.
Despite the operational progress made during this period, and following due consideration, the Company announced on
22 February 2012 that a decision had been made to place the Bullant Underground Gold Mine onto active care and
maintenance. This decision follows a review by the Company of the operations, the mine plan and financial forecast.
The aim of the review was to establish a mine plan and operating schedule that would as a minimum provide a cash
flow break even result, whilst continuing to self-fund the reinvestment in the development of the mine and associated
infrastructure. The review included a focus on the unsatisfactory mobile equipment availability, associated (and
excessive) maintenance costs and resulting impact on mine productivity including the ability to deliver future
production targets.
The review determined that the required mine plan and therefore the mining operations had not yet reached a stage
where the increased levels of development expenditure (and therefore development activity) could be consistently
reduced or deferred (for cash flow purposes), without compromising future stope production work areas within the
mine. When the cost of this re-investment into the mines infrastructure is combined with ongoing (and excessive) costs
to maintain the existing mobile fleet (comprising substantially of second hand equipment), periods of reduced
equipment availability and high ore treatment costs, the internal forecast indicated that the operation was unlikely to
generate sufficient future cash flows to break even for the next six months.
As a result of the above, the Company decided to immediately close the operation and place the project onto active care
and maintenance, in order to provide the Company time to re-assess its future strategy. As of the date of the
announcement, the Company’s operational work force was made redundant and a care and maintenance team
appointed. The estimated cost of terminating the work force in February 2012 is $478,000. The Company has since
sought to hand back rental fleet and equipment and has relocated all mobile plant and equipment off site to a secure
storage facility. The ongoing costs of care and maintenance together with the finalisation of payments to creditors will
be funded from the collection of ore sale revenue due from Barrick (Kanowna) Limited for shipments made in January
2012 and February 2012 and a planned capital raising, refer Corporate section below.