Hi updamountain...thanks for your comments, they are similar to...

Hi updamountain...thanks for your comments, they are similar to mine hence I agree.

From page 2 of the quarterly (refer Engenho financial)it states:

"...costs were also effected by underground to assist with the development of the mining schedule for the next 12 months as part of the Companies budgeting process. While these costs relate to future production, they have been expensed as incurred..."

I have gone onto the MUN website and pulled up the last annual report which shows a year end balance date of 30 June.

Therefore this would indicate that some costs that relate to the next 12 months (with particular reference to costs that relate to production after 30 june 2010)and this is being expensed in the current reporting period.

This would help to explain the RISE in cost of production in the quarterly, and to me it seems misleading as to profitability levels, ie the cost of production is likely to be lower than actually reported... interesting!