OK SS, no need to go, don't worry about it. You have a style and...

OK SS, no need to go, don't worry about it. You have a style and it gets under some peoples skin at times - this probably applies to me too. Contact me if you want to talk I don't hold grudges in the least.

The quarterly campaigns SS speaks of only started in the AFR just presented so - no - the whole effect I talk of is in this report. I do not stand corrected on this point at all.

There is some deterioration which is understandable, however a catch up is in progress with reduced exploration (brief) and development in order to monetize past work and get $ back in the bank again. This is not a train wreck you just have to examine and understand.

THE EFFECT:
It is a cash flow issue that stopped CRE in their tracks after the cyclone they could not fund it. The entire BGSM campaign effect - all the costs are reported in the 2011 / 2012 FY ...and so SS was totally wrong.

No need to go however, not necessary at all. SS contended this cost problem travels from one quarter to the next and he was RIGHT about that.

But it started once and that same effect (essentially one of) travels forward quarter to quarter to varying effect. We were short changed many days of toll treatment at the BGSM and this is supposed to even out - but it hasn't. That is the main reason for the deterioration but grade and Apollo have saved this situation, very well managed!

The cost has been spent and the income reduced OK does that make sense? OTC's (One Time Costs) like the road diversion for Chatterbox was essential investment & will return income for a long time to come. The pre-strip was a massive cost also, money in the ground. All this already spent and IN those AFR numbers and part of turning around Laverton.

So SS is right on a quarter to quarter basis however I was talking about the Annual Financial Report in context which is for the whole financial year. This carry over 'cost bubble' effect could not have carried over from FY to FY because FML did not take over CRE until THIS financial year. We had nothing to do with CRE in the 2010 / 2011 FY.

We have striped the top off, mined the gold bearing ore and then transported 500,000 tonnes by truck to BGSM (+ stock pile over and above this to mitigate risk) and the income offset - the financial reward - $ comes in the next FY or next quarter. Some of that investment just prudent action by a competent Board.

That is a significant cost - it is NOT mismanagement or a mistake or incompetence at all; that is just an offensive view IMO unless based on misunderstanding. So I try to explain, sometimes with a bit of angst.

Perma-bull - no - if I did not see this managed or I saw the operational progress mismanaged; then I would sell and be forced to remove support. I have been frustrated to try to explain all this only to be voted down and become the bad guy lately - apparently even posting 'positive spin' and so called 'lack of balance'. But that is more in context with SGG and I have no hard feelings on this it will pass IMO. Here is my view crystallized.

FACT 1:
FML managed to fund that CRE T/O without going to market for more cash post (after) take over. It is shaping up brilliantly, costs falling, production stabilizing - upside massive.

FACT 2:
FML managed to (more gradually) ramp up and accelerate operations at Coolgardie and The Mount and still complete the initial RAB drilling at Lake Cowan (Treasure Island). This was the purpose of the capital raising in early 2011 and CRE T/O stretched them but they managed it.

Therefore I argue they have done an extraordinary job of managing the whole take over and the business of mining and building a mining company. This is no small feat - to manage that.

Yes they were stretched; because of their integrity and knowledge they knew they could and would manage the cash flows they did not go to the market to raise cash to support the Laverton turn around. This is competence - a brilliant Board and brilliant team to achieve this. Did it assist share price in a general market down-turn?

The answer is NO and this is the bone of contention. This is obviously correct from a shareholder point of view. If we are to hold then we need to see how we now win because we have not to date in SP terms. We do own part of a much bigger company with greater upside potential in terms of SP and I will get to that.

FML have a vision of building a mining house. That takes investment and time. Do you really want to see what this Board and team can accomplish off a low base? Nothing wrong with the 'rocks' we all agree on that apparently. Well I do. So I will be supporting the SGG share placement. The company has to now explain themselves and will. They have even allowed me to start to talk to key staff and prepare a small report to assist with communication. This is what you guys and ladies need and can expect now.

STICKING POINT:
IDoc asked me if I have proof capital markets can only be accessed with 51% to SGG and the honest answer is no. I have been told by three separate sources I trust this is the case; but no I have not sighted the regulations or documents that state this. Sorry ID I am flat out and did not have time to come back to you on your list of questions yesterday.

Yes I took the high ground - not popular again - so what. We have to get analysis RIGHT for it to be of value. I am perplexed if this upsets anybody but concede I get frustrated when I see major inaccuracies and good people falsely accused based on those inaccuracies. Therefore I can come on strong - probably too strong I am pretty intense.

SS you are welcome back and stay at my throat as is your right, I can cope. People are welcome to their alternate view but expect me to tackle what I see as inaccuracies in here. If you are well presented with all the facts and want to disagree for your own position that is perfectly appropriate. We all have to make our own call on this.

Regards and best of luck to all,
CW
DYOR&DD