some notes(extracts)

After the panic sell off last week I purchased a few more MIC as I still think it has some on good upside over a period of time ,

The first should happen after the S/H's meeting next week ,

One of the added bonus is managment has spent some previous time (10 yrs) working in China
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All these note are extracts from MIC's site or ASX

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MIC
16 April 2004
QUARTERLY ACTIVITIES REPORT TO 31 MARCH 2004
MAIN DEVELOPMENTS
Summary
Michelago made excellent progress during the quarter in achieving its goal of becoming
a major gold producer, explorer and mine operator in China.
In particular, theCompany has completed complex negotiations to purchase an 82% interest in the BioGold Facility, Shandong Province, which is now the subject of a shareholder’s meeting on 5 May 2004.
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Based in eastern China’s Shandong Province, BioGold is already a producer with a profitable history and an estimated revenue for 2003 of approximately RMB499m (A$96m). Its treatment operations consist of an expanding bacterial-oxidation plant, producing about 70,000 oz pa from refractory ore, a cyanide-leaching plant, producing about 130,000 oz pa from non-refractory ores, and a 51% owned refinery that produces about 100,000 oz pa from dore, with around 250,000 oz pa directly attributable to BioGold. Assuming the realization of its 51% stake, Michelago’s share will amount to just over 125,000 oz pa.

Dear Sir/Madam
Proposed Investment in BioGold to increase to 51%.
On 12 August 2003, Michelago announced that it had signed a non-binding Letter of Intent to
. BioGold is a majority Provincial Government owned and operated entity which has
been in production for some two years, with estimated revenue for 2003 of approximately
RMB 680M (A$135M).
State Owned Enterprises (SOE’s), in the Chinese gold industry.
The amended BioGold proposal is subject to formal legal agreement, due diligence by both
parties and Provincial Government regulatory approvals. Michelago is currently developing a due diligence strategy to evaluate the potential purchase and believes there are opportunities to restructure, reduce costs and increase profits at BioGold.


waiting on government approval which Secker expects to receive around mid-year.
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Proposed terms for the purchase of an 82% interest in the BioGold Facility have
been finalised and were released to the market on 5 April 2004. Subject to
shareholder approval and other conditions, completion of the transaction, which is
anticipated to occur in July quarter 2004, will result in Michelago achieving positive
cash flows from that time and a robust base to increase its expansion into China.

• Sino Foreign Joint Venture (SFJV) registration has been completed for the Guangxi
Exploration Project (Michelago 90% interest). Initial exploration undertaken on the
project during the quarter included geophysics and regional geochemistry and has
highlighted a number of exploration targets within the Jinya ML and the
surrounding EL’s.

• SFJV registration for the Jinya Gold Project, which contains an inferred resource of
approximately 650,000 oz gold, has been delayed as Michelago negotiates to increase
its interest in the project to approximately 80%.

• The Xinjiang Province Wholly Foreign Owned Enterprise (WFOE) contract has
been executed. Michelago holds a 100% interest in this 2,700 square km project.
Initial re-evaluation of existing data undertaken on the project during the quarter
has focussed the Company’s interest on three target areas.

• A diamond drill rig will mobilise to the Jinya site on 26 April and a comprehensive
exploration drilling programme will commence on the Company’s projects in May
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extract

As a general rule of thumb, a gold company producing 100,000ozpa for 5 years at a cash cost of
A$300/oz should have a market cap of about A$100m, however, MIC expects to be producing
almost 120,000ozpa from BioGold alone and that excludes the Biox expansion.

So once the BioGold SFJV has been signed and received, MIC theoretically has the capability of rising to a
market cap of at least A$120m or so.

A slide was also shown of MIC with 435m shares in issue which implies that a few more options have been exercised.
Post the 57m shares placed and 9.5m conversion of options, there were 409m shares, 15m to come from the CN�fs, 2 x 50m tranches, and options (21.3 + 22.9 + 21.6 + 0.8= 66.6) for a total of about 590m shares (if all the options are converted) which equates to a
potential share price in the vicinity of 20Ac.

Our current target for MIC shares is >>20Ac, and we rate Michelago as a SPEC BUY.