plan b discussion, page-7

Hi KW,

Thank you for your reply, I had missed it earlier as there are too many posts here, I also went over the post you referred to and it was both TU from me. I had not given so much thought to the timing of BGS, although if it was known to impact the current financial year (i.e. expiring) surely that would have to have been disclosed? Your point about the capital required for growth above 200Moz is well made.

My analysis is based more on the forecast production < 200Moz, being cash positive in the last financial year and forecast 150M cash positive this year without the recent increase in long term gold price. Analyst reports fairly consistently rate our share price 8-10c on this alone, based on a long term gold price which would give us $100 less per oz. This allows for continued exploration but not trying to increase production beyond the 190Moz possible with current assets. Do you not think this is possible?

I agree also with other comments that a shortage of cash has been a serious limitation to date, but I do not think that is the case now. I would just say plan B could be delayed, (unless BGS processing is critical). If we are able to produce 190Moz cash positive, with reasonable exploration expenditure and a resources upgrade, our price would follow other gold explorers (and producers) up with the long term price of gold. Given this scenario in 6 months is it not most likely FML would be back in the 8-10c per share price range? Plan B then for $40K capital required would be a much more reasonable position and only mildly dilutive, or with good cash flow, a mill could be financed with debt.

The real value is in the long term, and such excessive capital raising now at our lowest price (raising) yet is dilutive to long term share price value, even without the ownership question. 6 months ago no one would have even considered a 5c capital raising, and our situation has improved since then not gotten worse.

On top of this, I and others believe having such a large holder with a controlling interest, introduces a significant risk that there will be no long term return at all, but a continuing falling share price. No one here expects holders of CRE to be paid at a higher rate than if they had sold earlier. Shandong may play nicer (at their own expense) but they have plenty of options to control all the value of the company. They have the majority vote after this in every decision.