trtjdt1......i would rather listen to the knowledge-based...

trtjdt1......i would rather listen to the knowledge-based commentary of NG compared to a poster on a general thread, where we can all be prone to the throwaway line.

anyways, here is a transcript of the MCO webcast of a few days ago. you would have to listen to the webcast to compare for accuracy. also, NG, as did...robertkna...the other day, quickly clarifies the major difference between narrow vein mining compared to Lihir's strategy of bulk u/g mining.
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Tom (the interviewer) : Progress?

Nick Garling (MCO md):

* Market generally knows re-working old mine, once Oz's biggest gold mine
* 1m oz @ 24-25 g/t.
* Spent $20-25m so far [$ always = bucks]
* Close to time to extract some ore
* We have prepared some locations within the mine 4 extraction
* Approval in place to commence.
* Will be seeking approval for further extraction in different areas
* Doing scoping studies, at the tender stage on an on-site gravity gold processing plant
* So exciting times for us at least at Woods Point.



Tom: you recently completed a very positive rights issue. RU now sufficiently funded and how will you be applying the money?

Nick:

* U call it very successful. Interesting: people call me every day and ask why it wasn't more successful.
* No: we raised about $2m and issued option rights pro-rata @ 1c now > (10c); yes so successful
* But > important for co. was the $2m
* We are like a lot of small companies: thou we do not have a high cash burn, we always would like to have more money in the tin.
* We still have 1.25m in the tin and do not have a lot of capital expenditure
* In terms of getting mining program up and running.



So I think we will hit the road running with cash flow before the end of the year

So I think we are progressing very well.

Obviously we got those options expiring 31-03-2010

Which gives us a fantastic opportunity to raise in excess of $12m.

And with the options well in the money, we are confident that we will raise that money

And people are already taking up their options.

And speaking to some large holders, and to other interested parties that have approached us in the last few months, we are confident that the options will be taken up. So, …. we're in a good place.



Tom: I read in this morning's paper "Dreams Turn to Dust" by Michael Vaughan.

Nick: he's a positive fellow!

Tom: he paints a pretty negative picture of future of gold mining in Victoria; what is your response?

Nick:

* First I do not read that publication; but someone showed me that article.
* Well I think MV is a pretty good journo and he makes some very fair points.
* I think the Lihir in debacle in Ballarat of an otherwise very successful company,
* Is not new news; I think it was flagged by other journos as recently as 3 or 4 weeks ago.
* Their approach without comment as to their corp. strategy:
* they obviously want to diversify to become one of the world's big gold miners,
* But their approach to this famous old gold field in Ballarat
* Which I hasten to add: is very different to our own gold field in Woods Point / Walhalla region in East of Melbourne
* They have approached it with very prodigious historical production in a totally different way than we have.
* They have approached it to upscale the tonnage and try to reap the rewards.
* Now there is no doubt that the field has a lot of grade and a lot of ounces.
* But it is not the right way to approach it.
* But they are a big company and have a certain number of targets that they have to fulfill.
* Whereas Lihir might want to process >1m/t pa, we are talking about 30-50,000 ton pa processing plant on site - totally different ball park!
* Our grade is higher. Our gold is more homogeneous; it is nuggety, but less so,
* & we don't live in the area of sedimentary area of Saddle Reef like Bendigo and Ballarat.
* We are in a totally different dyke hosted field where 90% of the gold is in relatively predictable quartz reefs within these dyke hosted intrusions into the surrounding sediments;
* So it is a very different geological picture; and it is a higher grade picture, at least in the morning star mine and some of the surrounding targets.
* And most importantly, Tom, it is a much lower thru-put and consequently far less capital expenditure.
* I read the amounts of money they are talking of writing off. I mean it is silly stuff.
* We have spent $20m, possibly $25m depending how you count on the project since 1992.
* Where our capital expenditure on plant is going to be < $1.5m, well less.
* And it is going to be gravity gold: we have a recovery of about 88% without using any nasties; and just in the first crush at about 250 microns
* So to put it in perspective, I think Michael's article is certainly accurate & applicable to Lihir & also in article Bendigo Mining have done fantastically well to downscale their aspirations & production to use hand-held mining machines.
* That is exactly what we will be doing at Woods Point.
* We will use a series of airleg mining teams to minimise dilution and obviously increase metal output
* So different situation. It allows anyone to say "Oh Victorian Gold - I told you so"
* But we are poised to return to production on a very small scale and be incredibly profitable.
* Putting through 40 or50k tons through our own plant, people will be amazed by the profit we can generate, when we do.
* Let's wait and see. The proof will be in the pudding and I think the pudding is rising.



Tom: Looking forward, what are you focused on as we move into the second half of 09?

Nick:

* the miners are now on site, so focused on getting the kinks out of the hose of first part of the mining program
* Getting some good grade ore up on the pad
* We have recently done some samples of the main two stopes/stoops? we are entering
* We haven't released those samples yet; that will be next week;
* We are quietly confident that as we move into those stoops that the grade will be good
* And we'll see us with a positive cash flow situation once we can start processing that ore.
* One of the big situations for us is the consideration of an onsite mill, or toll?? mining or stockpiling
* Whichever way we go we are confident we are gong to have some good ore o the pad
* And produce some gold by the end of the year.
* We misfired, to be fair, late last year and we have learnt some lessons from that and
* We are now going about it in a very positive and fundamental way leading to the end of this year.
* So overall I am very upbeat Tom, so its an exciting time for Morning Star Gold
* ….