west business article, page-17

Hi jumpstart,

Sorry about getting back to you a bit late but have been working on other things.

Think I can see where you are coming from, and if FML was like a lot of the other goldies out there I would say the thrust of your remarks would be spot on.

In my earlier reply to Recyug on this topic I mentioned that it was a shareholder decision on horses for courses as to what type of goldminer to invest in.

The decision for FML to mine the way they do (like every other mining company) is made at Board level with management and staff implementing what the Board has decided - lets take preservation of staff salaries out of the discussion as it is not in the equation.

I did not go into the decision making process that the FML Board went through in deciding to mine the way we do, but you can bet at the time a lot of attention was paid to the grades discovered by exploration, ore structure, ore types to say nothing of development costs and all sorts of other things, one of which would have been the history of mining in the Coolgardie District, particularly why it had virtually ceased by the early 1900's.

Short story from my perspective is that I think the grades they had discovered at decision time, along with the associated ore structures, development costs for high grade mining and a good appreciation of historical data were major factors in going down the lower grade mining path.

They have high grade ore at Coolgardie, however from what I understand it appears to be in pockets, rather than the longer narrow vein structures more common in other areas of the Goldfields -it does get mined and milled the moment they reach it.

If they hit a bonanza amount of high grade ore at Coolgardie, think you would find they would be pulling it out in a flash and feeding it straight into the mill, temporarily abandoning mining the lower grade stuff.

A related non put question of why don't we only use the higher grade ore from the Mount has been put on the forum before and there were a series of answers (some technical) to this that I am not even going to try and repeat, as I could not do them justice.

On the possibility of being a takeover target that is something in common to a lot of gold miners and in FML's case who ever the buyer was they would probably end up using the same style of mining for the same reasons FML does - I would not classify FML as an attractive takeover target at this point in time for this reason.

You asked what is the plan, when I think you mean what is/are the objective(s) as a plan gets modified to meet whatever the current objective(s) is, or are - if you want the current plan, would think that is a question for the CEO as it is probably commercial in confidence.

Have to admit that I have not checked the most recent objectives, however some of the old ones that stuck in my mind that have probably not changed were to be a profitable debt free company, to pay dividends as soon as possible, to be a 300,000 oz pa producer, complete the merger with CRE (probably the wording on that has changed a bit by now).

Hope what I have had to say helps, however if you got into FML without an appreciation of how it mines, nothing I can say on the topic will help your angst factor.

cheers, kentwang