plan b discussion

Hi Fitnfam, Recyug and Icy Doctor,

Sorry on not getting back to you on the questions you posed in relation to Plan B, but have been down with a lurgy over the past few days.

As I stated earlier, I am concentrating on Plan B to verify that it will work on the steady as it goes basis and in a quick analysis I provided to Fishing and Beer on 24 September concluded that FML could just reach a targeted 250,000oz pa by 2019, however it would mean ploughing just about all profit into mine development, mill expansions/upgrades.

By reducing production targets over the same time frame FML could achieve a baseline Plan B at higher comfort level that at least saw a reasonable amount of retained earnings available to strengthen its financial position.

No matter which version of Plan B you move forward with, they are all going to fail unless the critical Laverton milling issue is resolved by the end of December 2012 at the latest – unless an extension of the BGS can be guaranteed, my timeframe for a refurbishment of the Barnicoat mill indicates that in a best case scenario it would take about 11 months from the letting of contracts to having it running at near base load capacity.

Whether or not FML can internally meet the funding requirements for such a mill refurbishment, along with development, infill drilling and some reasonable exploration costs associated with Plan B cannot be really assessed until the results of the September quarter are known.

As to the forward costings applicable to Plan B, unless they have been specifically stated those attempting to come up with their own figures will be applying their own criteria to how they see the project or item – eg refurbishment of the Barnicoat mill to me would mean all the associated infrastructure costs including the tailings dams.

For Fitnfam on your offer to laterally undertake some discussions, would be more than happy to do this as I think we are both on the same wavelength – suggest we use CW as an intermediary for the exchange of email addresses as he has all my details including HC monicker (if this is acceptable to you just mention it in one of your future posts, as I always read them no matter what the topic).

cheers, kentwang