Ann: Kingsrose Mining - Project Update and Produc, page-6

re: Ann: Kingsrose Mining - Project Update an... Hi Mr Gordon and all,

Couple of articles I was reading over the weekend I found it interesting that so little exploration is going on in Australia at present and wonder if this will increase now Australia is once again open for business.

http://www.321gold.com/editorials/aden/aden092913.html

http://www.321gold.com/editorials/wright/wright092713.html

I spent many years building mining equipment and still like to keep my ear to the ground last year after the Las Vegas mining show I posted that IMHO not many gold producers would have a true cost of actual production less than $1,000.00 per ounce.

Clive my main man in the business these days has just got back from Bauma in S. Africa and Mozambique he informs me that mining costs are still heading up there as well.

http://www.bauma-africa.com/en/visitors

TauTona (Great Lion) is now over 3,900 meters deep (3 shaft rides) and requires some hefty air conditioning plant to make it tolerable for the mining crews (Rock face 55’ to 60’ C.) Traveling from the surface to the face takes an hour each way. (No production during travelling time.) At current oil and coal prices I can tell you they must have quite an electric bill each month and wage demands are not going away either.

In 2003 the mine produced 646,000 ounces @ 12.09 g/t for a cost of US $171.00

In 20011 production was down to 244,000 @7.55 g/t for a cost of $818.00

Personally I think those production costs are a little understated!

IMHO I feel 2013 and going forward they will be closer to $1,000.00 to $1,200.00 per ounce.

I guess one of the big challenges for our (ASX) gold producers is keeping a reign on costs and companies that can do that should do well. If KRM can continue to claim the lowest cost producer mantle and maintain the grades it and all of us should do very well!

I hope that’s useful information and worthy of your time personally I tend to trust what can be seen on the actual ground rather than the spoon fed Bloomberg blurb.

Cheers and very best regards: Andy