Been following this for a year or so myself,Have held in the...

Been following this for a year or so myself,

Have held in the past, but not atm.

I didn't really understand the rationale for the re-modelled Masbate resource that they released to the market a few months ago. It seemed to me that all they did was relax the parameters, and drop the cutoff grade from 0.7g/t to 0.36g/t. Why? It didn't appear that the new resource figure was based on any additional drill hole data.

Their bulk mining strategy will only target ore > 0.7g/t, so in effect a portion of the resource (between 0.36-0.69g/t) will not be eligible for conversion to reserves, and will not be mined out. I would also like to know what the average ROM head grade is predicted to be between years 2-5. By 2012, the mill will have to increase its daily throughput by 25% to compensate for the falling grades during the LOM, to maintain a 200,000oz p/a operation. So bear that in mind, that in all likelihood grade will decrease during the LOM.

On the other hand, the brownfields exploration upside around Masbate looks to be significant, particularly around Panique and Libra north. The area seems to be a little underexplored in general. The Panique resource as I understand it, is also not part of the current resource.

Masbate, while not a high-grade body, is a large resource. Management and financial risk looks to be low for the project, while country and project risk I would rate a little higher. Definitely one of the more robust gold stocks on the ASX, despite the lack of attention. I would also consider buying back in at current levels.