Ann: Quarterly Cashflow Report, page-13

Amigos, we should be clear about the situation.

Firstly, the one dump of slag is 1-2% but the other stockpiles of ore have much higher grades. Also there is a fairly large city called Grafton within about 50km which could be the place for the processing. Grafton is on the Clarence River and it has ports which could be used to ship the concentrate.

Secondly, Cangai is the highest grade copper discovery of recent times in Australia. Most new copper mines anywhere in the world have grades of 1%, even after metal credits. Cangai's types of orebodies don't grow on trees - nowadays they are very scare. CCZ has to focus its exploration on it, and worry about the other tenements later.

Thirdly, the terraine at Cangai has hills of 100m to 300m, but they are hills - not the Himilayas. The old-timers could mine and smelt the ore on site, and transport it out. Modern mining operations have better machinery to do it easier. From the announcements, the ore bodies plunge in lodes at a steep angle (almost vertically) from surface, so my guess is that future mining will be carried out by horizontal tunnels (adits) from the valley or plateaus. The adits will intersect the orebodies and mine the lodes by undergroud mining. This method is more efficient than other mining ops for this type of terrain (better air flow and easier water drainage, etc).

Fourthly, from what I have read, the drilling contractors were at fault, but the technical management of CCZ should have been vigilent, especially given the heavy rain at the time. They made some errors, but it can be remediated and the exploration should be continued as soon as possible.

Finally, the placement to sofisticates/professionals was successful at 2c per share. They see the value of the Cangai operation. There is enough money in the biscuit tin to keep exploring and we will get a SPP when everything settles down. Times are tough, but it's far from a disaster. Amigos, maybe these guys needed a good kick up the backside before they got too far ahead of themselves. Let's see what happens on Monday.