A few comments on the Q2 and the webcast:1. Gold and costs...

A few comments on the Q2 and the webcast:

1. Gold and costs exceeded expectations again. Apparently, until a few months ago the were uncertain that they could achieve good recoveries from gold ore as it is hard. I think the success of the blending strategy is significant as it paves the way for the gold only ore to be mined and developed and parallel with the CU ore. This should lead to lower cost operations over the life of PH.

2. Head grades are on the way down with mined CU grade at less than 1%. This will be reflected in next Q production (hence the lower production and high cost guidance).

3. The plant appears to be working very well with record throughput and recoveries improving for gold.

4. Western Copper will keep CU production at current levels for the life of the open pit

5. The reason they deferred development of the main UG is that they inferred that they are now looking to implement bulk mining methods for the main UG. This is a low cost extraction method, but can not be undertaken until the pit is exhausted due to subsidence issues. Once the Wester Copper decline is in they will begin studies on the main UG, so not much will happen here until 2011. But over time I expect this development to underpin the future of PH.

6. Continued success in the near mine exploration with some good hits below the western gold zone.

7. As expected TB was cagey on any details on SFR, but did say they have been waiting for an opportunity to enter for some time.

8. Cambodia is looking good, though not to much detail. TB said the exploration budget was 8M and that the geos are very excited about one hole (300m down hole width) which is yet to be assayed. They are targeting a multi-million ounce resource by 2011.

9. Copper production of 60,000 KT with C1 costs of $0.5 for the half year. Lets say we can expect an EBITA > 250 Million from PH (8cps).

All in all a great quarter with OZL doing well on the operational level and a good pick up with SFR. I like what I see.