Next Qtr positive cash flow, page-10

That's OK. We don't have to agree on everything. That's precisely what "makes a market".

Though, I agree with you that the new management may be superior to the old management (it appears that way thus far).

However when it comes to mining I don't believe that management makes THE difference.

Ie you can give a mediocre manager a high grade, high ounce, resource rich deposit and their mediocre management skill won't prevent it from being a profitable mine. On the other hand you can give the world's best mine manager a low grade, low ounce resource poor deposit and there will be nothing that manager can do to make that mine economic short of coming up with a revolutionary new mining technique that has yet to be thought of in the last 500 years of mining history.

So for me management is important, but the deposit is MORE important.

That said, I agree trucking some ore to another mill to bring forward cashflow was probably needed and it was nice to see them be proactive.

And I certainly agree with their pursuit of being a "debt free gold miner". So good on em for aspiring to that too.

And I agree that the strip ratio is certainly "decent". Not sure "impressive" is the word I'd use though.

That said, what we CRITICALLY disagree on is EXG's reserves... which is what matters most.

As of the quarterly statement they have just released they have their RESERVES listed as being 17k... NOT 887k!

If they had 887k reserve ounces they'd probably be on their way to being a billion dollar company. This is clearly not the case.

What I believe you are referring to is their RESOURCE ounces, which are very different to RESERVE ounces.

Presuming those resources will be able to be economically mined is quite a dangerous assumption (especially in a low gold price environment with rising oil prices and large question marks over the previous management's honesty/competence).

This quarter the C1 costs were around $1200 from memory, but that is not the total cost of mining. C1 costs often exclude taxes, royalties, exploration, administration, capital expenditure, sustaining capital, overheads, non-site costs, etc.

So when you're C1 cash cost of mining is currently $1200 and you hear management talk about "moving pipelines" you can probably write-off all those ounces below that pipeline while the gold price is below $1800.

That said, whilst management has said there are only 17k reserves left, my suspicion is that a decent chunk of the Bulletin South resources are economic (it's my understanding they used to be classed as reserves and the recent drilling there seemed to confirm the past results).

So once those remaining Zoro and Bulletin South ounces are mined that will be all the open pit reserve ounces...

And I'm not comfortable betting the house on those underground ounces will be all economic. And drilling to find more ounces costs money. Money that EXG doesn't have.

So right now they have 17k ounces that they KNOW they can mine profitably. Everything after is a "maybe/yet to be determined".

If you look at the latest quarterly and the latest presentation most of the information that should have investors either divesting (or at least waiting) is there. It just requires translating from "optimistic management talk" to "investor reality talk". For example:

"In hindsight, EXG inadequately prepared for transition from explorer to producer."
Translates into: Previous management didn't have the money or skills/experience to pull this project off and have probably ripped up your capital as a result.

"Inadequate cash to cover start up and deferred revenue stream associated with toll treatment."
Translates into: Previous management didn't think ahead or plan properly which has put now put us in a financial bind.

"Zoroastrian Geological Model was incorrect. "
Translates into: Previous management was either incompetent, unlucky or hoodwinked investors. At this stage all we know is that we don't trust the information we have available to us.

"Questions raised over other geological models in the mine plan."
Translates into: Because the last lot were either incompetent, unlucky or hoodwinked investors in regards to the Zoroastrian deposit we have reason to be concerned about how bad things are at all the other deposits, but we are not sure yet and we are going to have to spend more of your money (which we don't have much of left) to find out.

"Less Mineable and recoverable ounces."
Translates into: Shareholders are not going to make the anywhere near the return on the investment that the past management said you were going to make and we (the new management) would prefer not to quantity just how much less it will be at this stage.

"Bank Covenants Breached."
Translates into: The vultures are circling. Technically they have us by the balls, but in the hope of getting their money back they are going to lets us attempt to trade out. Hopefully they won't decide to rip our tiny carcass apart.

"GWR review, subsequently declined equity investment."
Translates into: The people who have made money in the past because they know what they are doing and have been successful at mining said that our project was rubbish and didn't want to risk their money to be a part of it.

"Next step: Determine how much of the 1Moz resource is convertible to reserve."
Translates into: We have no idea how much, if any, of this resource can actually be economically mined at the current gold prices, but we are willing to spend your money to find out.

"Nest step: Determine the potential for HG UG mining."
Translates into: We are not sure if there is potential for an underground mine. If not the 150k resource ounces that we have in our recent R&R statement and have been selling ourselves on are probably worth nothing.

"Next step: Assess the likelihood of discovering a new large, game changing deposit leveraging off CSIRO interpretation work."
Translates into: Right now things look terrible. We need to find a "game changing deposit" nearby and fast for the dream of being a sustainable gold miner that actually produces a return for shareholders to live on.

That's my interpretation.

GLTA.