no dividends yet, page-14

"Blythefan, you will most likely say that we need to have the other mining site checked out to build up resources. My view is that if the first site can not stand up on its own current resources and provide a positive cash flow then it is unable to survive in the first place......"

Too damn right thats what I will say.

I don't understand your "logic" that drilling a second resource isa waste of time. Clearly Perilya waste its time drilling Potosi extensions and Flying Doctor; CBH wastes its time drilling Hera and Panorama; Mincor wasted its money drilling Carnilya Hill when it already had four operating mines.

Firstly, drilling Gossan hedges the company against the risk of Kihabe not being economic. Which is basically is, though you believe it is not - due to being unable to understand "digging open cut for $1.20/t is cheaper than digging underground for $80/t".

Secondly, if Kihabe proves economic, and they find even another half a million tonnes at some grade worth mining at Gossan or even at 30-1 or elsewhere, then the capital costs of a milling operation at Kihabe is spread over more tonnes of ore; the mine life improves, and the NPV shoots up considerably.

Thirdly, if the company drills a second ore body and adds to its resource base, it looks better on paper. The current practises on the ASX are to buy companies with long mine lives and lots of zeroes on their resource figures, regardless of profitability. Look at CFE, GBG, AGO, etc. Adding second, third and fourth resources to Kihabe simply appeals to simplistic investors who just like thinking to themselves "I own shares in something with 50 million tonnes of dirt".

I think you suffer from an utter misapprehension of what exploration is about. If it was as simple as saying "we are going to drive into the desert and drill and find zinc or diamonds, back in a fortnight with a hundred million tonnes and a kimberlite" do you think we'd be having a resource boom? You seem to forget, or conveniently overlook, the fact that in orderto have the $10M to waste, MTB had to first be successful. Butcher Well, Red October, Yackandanah, and now Kihabe. Completion is an issue, but the list of companies which survived from the boom of the 1980's intact and are still kicking along today is very small indeed; most are big companies like Perilya, but there are afew like MTB and ADY.

The final problem I've got with your reasoning is that you seem to think the company should have just ignored the fact they had lead-zinc, and kept fumbling around for diamonds because at least it would have died concentrating on a losing prospect. Its a stupid, stupid, stupid way of thinking that you expect the company to ignore any opportunity that comes its way.