Ann: Quarterly Activities Report , page-2

I noticed two things in the qtly that I thought were interesting.

Page 3 shows Mt Garnet copper production, and the operating margin (over the past 4 qtrs) has remained flat (less than 3% movement up or down from the dec 09 qtr). KZL would not appear to be reaping the benefits of the soaring copper price, as their C1 cash costs increase over the same time period.

Page 4 spells out a similar picture. Since Dec last year, C1 cash costs have risen 37%, and cash operating margin has declined more than 50%, and this is not a one off qtr. It is now a 4 qtr trend.

HT1