significant sulphides, page-13

I've studied these releases and the background pretty hard. Sorry this is so long.

With a bit of educated guesswork, I'd draw three major and several minor conclusions. This said, I am biased, as Many months ago I sold up other gold stock investments to come into GBM.

A. GBM has 50% ownership of a new processing technology which now seems very likely to prove itself into a revolutionary proposition.
B. Based on this early information, all their tenements are likely to prove to be far richer than they have said.
C. They are taking a very conservative approach to their public announcements, and so the company is making no promises ... this means they are confident and so they don't need to promise.

Minor conclusions are:

1. There is a Geologist running the communications, the company is technically focussed, and so (on the good side), is unlikely to get tied into hype, but (on the negative side), their communications are really hard to understand, and so GBM will under-perform in the market simply through these communications not being understood.

2. They are producing gold in three forms
- course free gold (see photo in the last release)
- fine visible free gold (alluded to in this release)
- these gold bearing sulphides, which are almost entirely a bonus.

3. The gold content in the sulphides onalone indicates a gold content in this 30,000 MT of tailings of 13 g/tonne, plus free gold, the calculation being as follows:
- every 100MT of tailings processed = 100 Kg of gold bearing sulphide concentrates = 1.3 kg of gold = 42oz gold ==> grade 13 g/tonne of gold in the tailings.
- the potential result for the total 30,000 tonne stockpile of old tailings ===> COULD be 12,600 oz of gold in the tailings = $12 million dollars.
- but as they expected only 1 g/tonne (not 13 g/tonne) they had expected only 1000 oz out of these tailings. Importantly, this expectation was based on work done by the previous operator - with old technology.

4. The richness of the gold bearing sulphides (concentrate) is a surprise, and so they have not built the plant to process it - but are looking at their options, which involve some testing. I have seen no reference to chemical plant.

5. But they will be producing free gold at the same time.
The free gold drops out BEFORE these measurements were taken - but they don't say how much free gold. Why not?

6. This is only the first two weeks of operations after a 12-month plant build (weeks two and three of June). So, reading between the lines about what they are NOT saying ... They weren't expecting this and they didn't as yet have all the disciplines in place to be really accurate themselves. What do you do when you get a new toy - chuck some stuff in and see what happens ... that seems to be the case here. Hence the cloudy communications and the waiting weeks for the independent report.

7. Therefore, it is either or both of:
- they got lucky and struck a rich patch in the old tailings; or
- the tailings are consistently rich, and the Pfarlert concentrators, which I understand from previous releases are a new patented invention and owned 50% by GBM (via 50% ownership of "MRT" - Mineral Recovery Technologies) are recovering gold which could not previously be recovered, in which case this technology would be worth hundreds of millions.
BUT - they do not know themselves until they process they lot because they haven't tested it themselves (relying on the last operator).

8. If it's the latter, and the "Enhanced Gravity Concentrator" technology is recovering gold down to 10 microns that no-one knew was there, the statement that they make in their footnotes about the technology starts to look like a huge understatement ... "the technology has strong potential to reduce operating costs and enhance ..."

Firdy.