plan b discussion, page-2

Hi Kenta,

Very well written.

If anyone cares to look back at the single biggest hurdle we have had in the past 3 years, it has centred around one item. All of what you speak of requires cash. We don't have it at the moment. Why? Cash Costs.

We can blame the price of gold, unknowns and everything under the sun, but with our cash costs where they have been, we have simply not generated enough money to save some for a rainy day (or the development and investment items you have listed below). Gold price has hovered between 1400 and 1800 for over 16 months now, and during this time, we have still been unable to develop a war chest (which is what we need). If we had cash costs of $700-$800, then I would largely consider the need for this deal to be largely redundant as we simply cannot be unlucky enough to have massive $15M one offs one after the other (at $700, we would be looking at an extra $76M a year in cash). They are not however, and even at $1000/oz, the extra say $19M we get per year at a run rate of 190,000oz is only 4.75M per quarter or $1.58M a month. This sort of cash is a round of drinks or so it seems, as unfortunate as that may be, at FML.