second half forecast, page-11

Hi Oz

I agree with your premis that the 'true' cost per ounze could well be higher than the cited cash cost.

That said, your calcualtions have a (for example) a couple of significant flaws which means that your calculated cost per ounce is overstated (and perhaps by a large chunk).

For example, you assume that the company has sold all the monthly production. In the last two quarters, the comapny has been building its gold reserves (last quarter - produced 12061, only sold 7054. 2nd last quarter - produced 11478, only sold 10596).

Another example, the company has been engaged in a significant push re mine development and and exploration and over the last couple of years has increased its resources / reserves. Admittedly, these plateaud in the lst 6 monthly update but the recent raleases strongly imply that at the next update, there will be a significant increase in resources/reserves. When the company purchased the Henty, it had a life of @6months. Its now got a life of @5 years.

So if your taking a holistic approach to the 'cost per ounce', the above two items alone could 'knock off' north of $300 from your calculations.

I agree with you that these matters are not straight forward. Good stuff to discuss though.

Cheers