Ann: Quarterly Activities Report & Appendix 5B, page-23

A follow up to yesterday's initial observations....and wrt to my comments on Yukon Gold in particular. Upon reflection, I may have been taking too literally the wording "development" in the description of internal modelling of break-even price.  It would not make sense for the 'under USD40' figure to only pertain to 'development' costs...as that would imply a USD3-3.5 billion development cost for what should be a few handfuls of wells and a near distance tie-in to Port Thompson facilities. Doesn't pass the sniff test.  So, more than likely it is a modeled breakeven price at which NPV equals zero for full field development and full life-cycle resource extraction.

On that basis (using USD40 b/e)....and with similar assumptions used in past estimates of their NPV factors.... at a POO of USD61 (current approximate), the NPV of full field development and resource extraction is between USD 5 and USD6 per bbl.  If POO hits USD70, then the NPV grows a bit to between USD 7 and 8.  Obviously the lion's share of this NPV would have to go to the operator that funds this development and extraction....so the question becomes how much of that NPV is 'retained' by 88E by FO or SO.  Perhaps USD1 per bbl?? Maybe more?

Each USD per bbl for 80m bbls at Cascade translates to an AUD 'value' of about one and a half cents per share on a fully diluted basis.  But more importantly, gives the company a sizeable warchest to unlock value in Icewine.

Of course, a rising POO helps, but not so much as to dictate a waiting game for us as a seller.  On these numbers, the time to deal on Yukon is now (i.e this year).  A conclusion which is 180 degrees from what I implied yesterday.   Oh well!

All IMO and as always, I may be totally wrong.