Groundzero - New BFS 18 months - why??Although TTR is in...

Groundzero - New BFS 18 months - why??

Although TTR is in reasonable finacial shape (debt free and as at December 07 had nearly $10 million in cash and investments) they are not in a position yet expedite the process. They need to use the current liquid assets wisely.

If they could go to the market or make a placement to raise funds to run more drilling rigs they would. However, with the share price so depressed they would be giving away existing share-holder value by doing so. We all know and TTR management know that the share-price is massively under-valued by the market. Remember TTR directors, Keystone investors and close associates hold I beleive close to 50% of the stock.

I would guess to complete a water-tight BFS rapidly, TTR would need the injection of another immediate $6 million. To issue shares based on todays share-price would be a disaster for shareholders. They are not going to do that to us.

The way the market is at the moment even good news is not having any impact...........it might be better in 6 months and then some fundraising and accelerated drilling (extra rigs) might happen.

It is also not the right time to raise cash by selling their investments in ATW Venture Corp and Silverlake (from the Burnakura and Tuckabianna gold assets settlement). Although ATW shares have increased in value marginally, Silverlake have not).

Although we would all like to get cracking at Phillips River the funding issue for both drilling and project development is paramount. It is not a good time to raise funds and I am sure Hamish (expert in project funding) and the other Directors believe it may be a good 12 to 18 months before confidence returns to the Juniors and true value is seen. Risk capital for mining ventures is not there at the moment.

Even a JV (with for example Mincor who have the cash to assist) would not be favouable to existing share holders.

18 months is not a long time in the life of a mining project (I would guess from greenfield discovery to full scale production on average would take at least 5 to 7 years maybe longer). TTR lost a couple of years with the Burnakura diversion. We could be up an running now if not for that distraction and capitalising on current good gold and copper prices.

In summary I think it is prudent to have a project time-line with a BFS that is released when market conditions are in much better shape. The 12,000m drilling program is all that TTR can afford at the moment.

One final comment from a discussion I had today with someone who knows the junior mining business far better than I do. He feels the uplift in the junior mining segment will be led primarily because of mid caps and majors shopping around. China also is still after significant equity in a variety of Australian miners. On discussion about TTR he said Trilogy is potentially of a size that may be attractive to the Majors. (remember Homestake/Barrick were very much interested in Trilogy in the early days). The recovery is certainly not going to be led by retail investors but it is the best time ever for them to take positions.