jump in spot price tipped, page-4

re: 1st ags jorc Hi Geldmangel, Trader10 et al

Your interesting posts made me review my notes from the AGM. I specifically asked a question at the AGM about whether the company would pursue long term contracts, and whether as a minority partner they would be locked into Heathgate's desired development and sales arrangement. In particular, I had hoped (perhaps naively) that the JV for production might be structured so that each party may take their share of production to sell as they wished.

The comments in response were broadly that any development JV is yet to be negotiated, and the relationship with Heathgate was very healthy and not a one sided (they manage) arrangement. It doesn't mean that AGS will get its way, but my impression is very much that AGS is so very closely held by Gandel and co. that they will push very hard for a structure that suits their personal desired result. Moreover, it was stated clearly that the board does not favour long term contracts to be entered into. But from memory, they are not averse to considering short term (maybe 2 year) contracts for sales.

The board was clearly of the view that U prices are going to continue up and they do not want to find themselves with a hopelessly inadequate price outcome. My notes record that they wish to have options re funding that will prevent bankers from holding sway to demand contracted sales. It was also suggested that open pit mining of the resource was going to be considered because the current and outlook prices would justify the higher cost structure.

However, I am a little concerned that the exploratory work so far appears to be focused on testing the ISL route for recovery. It would be much more expensive for open pit due to the large pre-strip requirement.

I am anxious to get some further guidance on the development timetable, the mining method, capital costs etc...I know this is in the future but even a timetable for undertaking a BFS would be good to have. Am I expecting too much? Seems that Heathgate, with their deep pockets, private ownership, and secrecy do not have to follow usual practices. Also, the AGS board's clubby character and the very large shareholding of Gandel, seems to contribute to the intrigue.

I may be expecting too much at this stage of exploration but some sort of blueprint for the way forward would certainly be well received in the market in my opinion. I would like to think that once the initial JORC is in the public domain, the company will rapidly release these further plans. I'm interested in others comments.


regards
DF