Ann: Production to commence at historic Victorian gold mines, page-38

Hi Vertigo,

Only listed companies are required by law (ASIC and ASX listing rules) to follow the JORC Code (and VALMIN - VALuation of MINing)). JORC underlies VALMIN and is essentially there to help ensure information released to market can be relied on. But JORC and VALMIN are really there for the VALMIN end of it (SS, PFS, BFS etc) which are really about getting BANK FINANCE to buidl the mine. JORC was originally developed by the majors in response to ASX rule development.

JORC is still targeted towards large homogenous deposits (major Capex hence bank finance) but it has been written to allow for smaller, riskier deposits also (Competent person in that orebody). Also following JORC doesn't have to lead to Valuations of economics. Thats a call for management based on risk and if they need Bank finance Vs other finance (Equity or debt - con notes, streaming etc). Its a basic call on how much drilling (or other info like historic ops and geophysics) is required to provide sufficient confidence. This is the call on $ spent on drilling Vs mining.

The more variable the deposit (I have spoken about Variograms that are a graph of how the orebody varies in relation to how far away from last drillhole) the more risky between drillholes and thus the more expensive to drill and step up through the JORC Code (and thus VALMIN) levels (Inferred - Measured and Resource Vs Reserve (Ore = Reserve except a special carve out for Iron Ore in JORC). I see that even AUL are (Incorrectly) using lowercase "ore" in their announcement (same as AVQ recently) when they should not - misleading.

So do you want the company cash destroyed trying to drill the nuggety deposit to high levels of JORC? Why?

Did you not invest in a sector that you should have expert managers making this call?

Do you really think you could sit in that Management seat, at the risk of getting sued for incompetence, and make these calls?

Face it - Woods Point Dyke mines type deposits are nuggety thus cost too much to drill - but can be confident using the successful historic approaches (less drilling and use incidence of hitting high grades etc).

I could discuss this forever, but at some stage you need to leave it to the experts.

KRUM