Ann: March 2018 Quarterly Report, page-13

Fangk

I hope Spec's and JID's comments have answered your question.

The thing that stood out for me was the grade going through the mill after the high expectations that they would mine (and hopefully process) high grade ore up to around end June 2018 - I think the grade mentioned was close to 2 grams/tonne. Had the average milling grade been 1.5 g/t (which would still be lower than what was achieved in the December quarter of 1.65g/t) they would have produced an extra 10,956 ounces that translates into about another $USD14.5m in revenue (not sure if all of this gold would have been sold in the March quarter, but the majority would have been). ASIC would be much lower at around USD900 (based on sales rather than gold production) thereby providing a big operating margin to fund admin/exploration and some of the capex/debt.

There is no clear explanation why that did not happen. Was it due to an inability to access the high grade pits, and if so why (rain?) and how big an impact was that on production? Was it due to an over-estimation of the grade in the supposedly high grade pits on which so much money was spent waste stripping in previous quarters (Monkey Hill or whatever it was called). I dunno - no doubt Atomic will find out one day.

Given what has just been reported I have zero confidence in their claim to maintaining guidance for the year on gold production and AISC. The guidance for gold production is 145-155k ounces which requires them to produce between 41-51k ounces in the June quarter. In order to hit the lower level target of production the average milling grade for the current quarter would need to be around around 1.61 g/t. There is no reason to believe this will happen.

I note that the waste strip ratio for the March quarter was 9.2, which is way above the average for the ore reserve of around 6.8 (from memory) so another reason why costs were high. Can I trust them that it will fall next quarter? Why is more earth moving machinery is to be added? What is wrong with what they have/had? Who pays? What is MACA's role in all this? Why were these issues not addressed previously. These are the sorts of questions management should answer.

I also note that the report does not say anything about their debt situation or progress with obtaining the Sprott debt facility.

Other than saying that BDR is a very poor choice as an investment, I can not say whether at these low prices it is best to just sell out or to sit tight. I think there will be a lot of selling when trading suspension is lifted unless they come up with some super deal/s.

Basically this management team stinks about as much as the previous one. However the previous mob brought in MACA so perhaps they set up BDR to fail with that decision.

GL.

loki (its only money)