Ann: Additional Pyrometallurgical Extraction Results, page-52

Hi ST,

Firstly, please don't think I am down ramping, because I'm not - just throwing in an alternate view to keep a healthy and balanced discussion. Comments below.

You said:
"I will need to clarify with the company, my thoughts were it would be 50,000t going through the mill, but you might be right?"

Without further clarification, I'm inclined to say 50,000t is 50,000t of material in total, not ore only. As stated in the Ann "A trial mining licence enables the Company to mine up to 50,000 tonnes per annum from each project area". Maybe if they have the perfect deposit they will get 50,000t of ore, but I find that unlikely as they haven't drilled it - it would basically be unheard of. Remembering, they are only processing up to 20t per month so 50,ooot allows them the flexibility to selectively choose what they want to process and stockpile the rest for sampling/processing at a later date etc. That will most likely lead to showing a higher head grade than what the actual overall 'reserve grade' would be, should they get it right.

You said:
"I'm not sure about your 50/50 split."

I didn't say that, you did. You sad :"Well make cash we only get half of that.." Without further info, it's hard to know how the revenue split will work, one thing is for sure, Marcelo da Silva Pinto M.E won't be doing it if it costs them more money than what they receive. There may be a fixed cost component to cover operational costs, and then a split on actual revenue - who really knows, we need more info here.


You said:
"Another question is, what price do we place on Juma East? What value does it currently add to the m/c?"

Hard to put a price on 2 mineralised drill holes. Great grades, I agree.... If all stated is true. But for all I know, it's 200m deep and may well be an isolated pocket/seam of mineralisation or it may not be. Need alot more drilling to delineate true widths and depth therefore any value attributable can only be speculated. So far they have said "true widths may be approximately 34% of down-hole lengths" Which will lend itself the U/G mining providing the strike continues at depth. With current info, open pit would be a stretch. The holes ending in mineralisation is a positive indication of strike continuation. I think the value attributed has well overshot the mark given where they are up to.... that's only my opinion though. I won't say what value I personally think BBX is worth because I'll get slammed as a downramper more than what some would already say but lets just say it could be around 50% of where it sits now.

You said:
"To say what they have reported so far may not represent true grades is just your opinion at present. I believe they are achievable when you compare them to what has already been produced at Juma East."

I think you may well be confusing the different grades here. I was referring to "head grade" grade from mining, not lab sample grades from fire assay or met plant that are diluted via reagents etc. Mining an orebody will result in a different form of dilution being that an orebody is not always consistent and is diluted via waste rock/material. This can be minimised, but not avoided on any larger scale than selective sampling. This will reduce avg head grade, depending on the level of dilution achieved.

Me personally, I'd like to see them get the drills spinning and delineate an orebody/s with consistent grades before they start a complex met work and mining program. They must be confident the ore is there on an economic scale to be doing this, otherwise why waste the money? Which makes me wonder if all info has be disclosed? It just sort of feels like they have skipped ahead of themselves too quickly or maybe I have missed something....

It's an interesting story and there is a long way to go. Will be watched closely by many and heavily scrutinized given the recent history and the high MC. I do hope it goes well for you and others though - will pop back in from time-to-time .

Pretty rushed post, hope it makes sense.