funding, page-9

Hi Plough,

I hear what you are saying and fair enough. A couple of points though:

(1) In terms of LL, yes we have been diluted (largely by me!) due to the stuffing around at LL and the subsequent additional holding costs (e.g. project costs for steel, etc have increased in the six months).

However, the upside is that the delays have allowed us to hedge 30% of production at a much better rate.

The six month delay (from March) has allowed the 126,000 oz to be hedged at + USD $194 (ie $1,294 today vs. $1,100 in March). This equates to an additional $24m (AUD $26m) in headline revenue for the project.

(2) We are going to need extra inflows of capital to develop Ecuador (mine development, exploration and building a gold plant). Something like 'You can't make an omelette's without cracking some eggs' type stuff.

Whilst we get diluted with extra capital the size of the pie increases on an EPS acreative manner, thus meaning that we are all better off despite having a smaller % in the enlarged business.

Cheers
John