Post visit

I thought a new thread would be the best way to give a report on my visit to site making it easy to find and not get lost. The internet at the hotel is not the best but I did read some comments on HC about the visit and , as my daughter would say, OMG.. what is the matter with some people.

There are some things that I can not comment on, like how many investors went and who was there as that is there business and not for public consumption, or anything to do with production as not specific information was given, obviously, as that would be price sensitive. Something that I did not take into account was the language barrier, there was always an escort with us to translate, however it is not as easy as you would think. For example while I was in the winch control room, I asked why the skip was not being loaded and just sitting there. The reply was that they where waiting for an operator, that there was no operator to load at that time as the operator was busy elsewhere. That had me wondering, do we only have one operator per piece of equipment, or was the operator sick?

After I left the winch room I ask my guide about why we did not have more operators, after about ten minutes of back and forward, the problem was in the translation, in Brazil they refer to a piece of equipment as an operator not the person operating it as we do here. So the actual story was most of the miners can operate all the equipment, and what they where waiting for to load the skip was the loader that was tied up clearing some spillage so they could continue loading. All perfectly normal in any mining operation. Before I move on, while in the winch control room, the winch operator and my guide had a, stern might be the right word, discussion. I asked what was going on, the issue was that the winch operator was asking what I was asking about, was I there to rubbish him ( probably another inaccurate translation) after my guide explained the operator was fine and happy to answer my questions. So my take on the skip and winching part of the show is that it works very well and is very reliable.

Now the workshop, like any workshop on any mine site there was equipment in various states of repair. Some waiting for parts and some waiting for a fitter to complete the work. Being a fitter myself, this was exactly what I would have expected to find, every workshop could use some more fitters from time to time and use contractors to fill the gap. They do the same thing and get a local contract fitter to come and carry out a specific job on a as needed bases. The bogger that had the new engine then broke down again, it was a issue with the rebuild, the company that rebuilt the engine used the wrong fire rings making the heads to close to the pistons, they where there installing the correct ones and it was running that afternoon, so it was only down for twelve hours at the end of the day. So while in my opinion the workshop could do with some extra help, as every workshop could, but the guys that are there know what they are doing and get in and work. According to the guys on site they should have three boggers working within a month depending on suitability of the third machine. I think it is a little longer than the other two and they need to make sure if can move around before paying for it. I think it will be fine, but best to be sure I suppose.

We went down the mine on the last day, my lasting impression of the actual underground was just how small it was. I worked in open-cut never underground, but still when you look at a mine development plan then go and actually walk it, it really brings home just how early in the project mining actually is. The amount of development so far is nothing when compared to how much is ahead. Very early stage of development indeed. I asked the Geo with us about the old line," we find samples of visible gold and through them in the mill everyday" as to how often they actual do see viable gold. He pointed out the vein and said have a look, almost every piece I picked up had viable gold in it. He was explaining about the pinch and swell of the vein, my understanding now is that no matter how thick or thin the vein is the grade remains the same. He also explained, among lots of other things, as to the importance of carbon, I think it was carbon, showing up in the material, that it was and indication that the vein had closed and would be the end of the strike, but in the level we where in that was not the case and that the vein opened again, so they where going to go back and check if that was the case in the upper levels and that could substantially extend the length of strike in the high grade Mestre zone, but they as yet do not know. One the way down he also stopped and pointed out a large "intrusion" coming up from what he believed to be Tinteiro IOCG deposit, you could clearly see the presence materialisation in the intrusion. So early days in the underground with a lot yet to be understood by the Geo's, both in the network of the gold veins we are mining at the moment and with what is below the gold veins. The system really does look to be very big as reported and continues further along strike that I thought and the down dip extension is just like they thought back in MP days, deep.

The process plant is at the office area so we could go for a look when ever we wanted to and see what was going on, as long as we had a guide. It was running all the time I was there with the occasional short stop for little things, foreign matter, like broken drill rods, or a little choke up. It looks as in new condition and the mismatch of equipment size was clear but not a problem. I have no idea how much was being processed or what the grade was, but it was running constantly. Seeing the gold room was interesting, the table runs most of the time, and you could always see gold separating out, sometimes only a little sometimes a lot, it is constantly being feed concentrate coming from the plant. They where also smelting while we where there, did not see the end result as it takes quite a while and we had to move on. Again no idea how much gold was being won or how much was being produced each day, but it was clearly a continues process, not just something they did a few hours a day. We did not get to pick up any of the gold or take any photos as that was only allowed if Richard was there and gave his authorisation to do so in person, unfortunately he was not able to be there at that time. Just on the photo front, there was no place other than the gold room that we could not take photos and ever question asked was answered the best they could without getting into trouble for disclosing sensitive information. You can see the problem between mining and processing, the plant is pushing mining for high grade, but mining has not had time to develop the drives to give it to them in any quantity as yet. I think they where hoping to be able to deliver more this week depending on how the underground crews go. It is a lot more involved than I though getting access and and mining the intermediate zone. We just need to take a breath and they will get there. I am glad it's not me down there, bloody tough gig in the mine.

I can see why they have been releasing information on the exploration activities lately, keeping in mind these things move slowly as we could see. So much ground and so much information to try and collate, you should see the drill cores in the exploration shed...... There is no doubt in my mind after seeing what is going on that the future of the company is in exploration, I wish we had ten times the money to spend on it. What has happened in the past is that other companies, Western Mining, Yamana Gold and Troy both themselves towards the end and through SML have done a massive amount of work in the area, spending tens of millions on exploration, but couldn't seem to ties it all together due to a few reasons. Firstly new information that comes along, like discovery of faults ect that previous exploration was now aware of, and secondly that some of the testing methods where not the correct ones for the type of gold along with not testing for minerals that we now know are there. There where situations where a hole was drilled and came back as a duster, then for some reason a twin hole was drilled right next to it and came back with great grades, the geo's are still sorting all this out. Other examples of mistakes in the past is when they put a whole group of historical drill results into the computer that beings everything together, then look at the holes that should have reported mineralisation but did not, they find out that that section was not tested, the core has not even been split, why, the do not know, but they are onto it I can tell you. Sertao was minded believing there was around 50k oz there according to the drilling then produced 250k oz, this is repeated over and over. The geo's explained why they the discrepancy was so large, a lot went over my head, but the wrong processing was being used in the lab was my take. There is another area they have only just started working on and have put a very experienced geo in charge of it. I am not to sure what I can say without getting into the poo, so best to wait until the company put a report out to the market then I can add more if I can. I am just a little worried that some might think it is price sensitive and don't want to go there. I don't think it is as the information is already out there in the market from other companies, you just need to know where to look and know how ties it together. So the wrap on exploration is watch this space. In my opinion we are very lucky the JV with Anglo was never signed. The ground is worth way more than what they wanted to front up and could have tied our own exploration up for years not doing exactly what they are doing now. O, just on the JV, I did ask about where we stood, apparently they had it looked over and it is not binding as some would have us believe. I can't believe that a company as big as Anglo would do that, but there you go, the ball is in our court.

I have to go, so just to finish I will touch on out boss over there, Richard Crew, he is one impressive guy. He knows everyone, has contacts hanging out the wazoo and has a real passion for the project. He speaks perfect Portuguese, no one could do his job effectively if they could not, understands the local culture and knows what he is doing along with being a hell of a nice guy.

There will be some of you that won't like what I have reported, maybe wanting more information about production and such, others might appreciate the effort I have went to. It was my time, my money, I owe no one on this forum a thing and if that is not good enough cough up the 3k and go for a look yourself if they have another one in the future. After what I have seen, and it is not all perfect for sure, I will not be selling, but some of us need to lower our expectation for the short term, it is all much harder then I thought.