Ann: Underground Drilling Commences at Talang Santo, page-2

The resumption of UG drilling is good news even though the 3 hole results are
just average. Ironically the lower AU result is higher (equivalent to 12g/t AU) than the
other two with silver factored-in.
It seems that the new CEO is prioritising drilling above lifting throughput from 384 ton/day
to 500 but of course by the AGM this may change IMO.*
KRM's priorities now should be
(a) retire debt
(b) exploit the high grades of the splay grade (make hay while the sun shines)
(d) ensure optimum uptime be supervising safety, attending diligently to R&M
and ensuring that a suitable supply of spare parts are available on site.
(in the past there has been delays in shipping-in parts from overseas and inordinate
delays in having these parts processes by a "over officious" Indonesian Customs regime.
So the key is a good R&M program with scheduled parts replacement already on site rather than
maintenance management by crisis.)

A progress report on production since the last update early Aug would also help
Next week would be great.

Cheers,
all in all, is looking good.
Moorookamick


PS:
* this lift of 120 ton/day for a $2mil spend would mean :
- 43,800 ton a year throughput
-or 18,300 ozs gold (15,555 ozs KRM share)
-or $21 mil extra revenue KRM share
-or about $10 mil NPAT
-or an EPS of 2.7c or a sp lift of 27c based on a P/E of 10.
For this reason it is difficult to argue that there is a benefit
in keeping this extra gold in the ground while the prospects for
the POG at present is 50/50
(all IMO, of course)
MM