Ann: High Grade Hits in Oposura Central Zone, page-36

In the course of a scoping study, the financial model is done last, when all of the operating and cost parameters are to hand.

So AZS have cherry picked the best possible base case metal prices when they chose to use the July base metal prices, rather than the prices that that existed later in Sept/Oct, when the modelling would actually have been done.

The main purpose of a scoping study is to prove that the project is economically robust enough to justify a feasibility study. The AZS management team suggest this has been achieved (note that quarterly report suggested a prefeasibility was going to be done?)

The problem is that when the process rate is set, the bar is also set for the metal price required for the project to go ahead - in this case a price higher than what currently exists.

I still believe they should have kept on drilling to define a larger resource before doing the scoping study. With Economies of scale might have got a better result.

What is the chance further studies are now put on hold whilst more drilling is done?

cheers

Gosouth