progress of deep hole, page-27

Hee hee MickyD, the share price keeps hanging tough though eh? Could we be seeing a move from West to East and open pit to underground trend in Australian gold mining? WA goldies have been decimated in the past month.

CTO has never had any money in the bank. However, what little gold it produces is at a very healthy margin. No point having lots of cash if you’re draining it even more quickly. Have you read SBM’s quarterly today? Gosh, now that is bad, razor thin margins if any at all.

As I’ve said before, I had a 3-hour chat with ML in June (RIU conference). I was sufficiently impressed by his integrity. He would prefer debt to accelerate production. But getting to 100k pa is possible at Warrior without it. 50k pa and 100k pa are significant targets but require the power hook-up.

CTO’s exploration costs were $0.5m in 2005, $0.9m in 2006, $2.5m in 2007 and $0.9m in Q108. It’s no wonder there hasn’t been a reserve increase in 4 yrs! But the exploration expenditure is increasing as production (cash flow) increases.

So I am looking for continued quarterly production increases and the reserve upgrade in the next 5 months. Plus more details about forward production scheduling if the extra power ever gets connected. We’ll see what the quarterly provides.

Rowingboat.