Ann: Resignation of Managing Director / Appointme, page-26

re: Ann: Resignation of Managing Director / A... Hi Lionel,

I'll have another go at this, from a different angle.

Remember I'm not a Geo, nor do I have any mining education whatsoever.

However I'm always up for a challenge, lol

Back before we began mining at WD, it was stated that we had an indicated resource of-

5.7mt @ 1.07g/tAu for 201oz Au

of which-

4.94mt @ 1.07g/tAu for 170,400oz Au was the reserve.
(conversion of 86% from indicated to reserve)

The expected recovery rate was 70% which would provide 120,000ozAu.


ASSUMPTIONS (Presentation October 2009)

- Au - A$1100/oz
- Recovery 70%
- Production 120,000oz
- 30 month project life
- Costs � A$570/oz
- Peak Funding ~A$20M
White Dam Free Cashflow Exco Free Cashflow
CASH FLOW
- Project - A$42M
- Exco (75%) - A$31M


So if you take the reserve figure at that time, of 170,400oz X 70% recovery = 119,280oz, so that adds up well.

Note:
- this was at a cutoff of 0.4g/t


Then in September 2010, the cutoff was lowered to 0.3g/t

This brought the total indicated resource to - 7.8mt from 5.7mt

An increase of 2.1mt, which if converted to a reserve at 86% would give 1.8mt for 65koz X 75% recovery = 48.8koz

So a total production of 120koz + 48.8koz = 168.8koz total (Sept 2010)

The average production rate has been around 6600oz per month (20,000 per Qtr).

From the begining of the project in April 2009 at an average rate of 6600koz per month this would give a life of mine of 25 months, so production until May 2012 (which is in line with the last quarterly, saying production would last until mid 2012).

In the last quarterly it said that 4.7mt has been placed on the leach pads & 100,342koz has been produced, so it would appear that there is still a maximum of 68.5koz (51.3koz net to Exco) left to produce.

There was also a mention that an increase of 330,000t of ore for 7,400oz Au could be used from the Northern Cutback.

This would represent another six weeks of work to place on the leach pads (about 200k/t per month) and another month or so of production, taking it to around June 2012.

The production still left to produce would also increase to a maximum of 75.9koz gross and 56.9koz net to Exco from the main pit.

However there was a note in the last quarterly that said-

" The previously reported metallurgical testing of mineralisation below the current Hannaford Pit floor was completed during the quarter. This re-defined the high cyanide-soluble copper boundary for mining purposes and led to a decrease in remaining mining inventory of 3,400 ounces. The consequent reduction in budgeted life-of-mine production is expected to be offset by recovery above budgeted rates."

So we may lose up to 3.4koz at the max.


Taking away 3.4koz, leaves 72.5koz gross and 54.3koz net to Exco from June 30 2011, if this cant be recovered.




From a different angle the last quarterly table for WD showed a depleted resource of 1.5mt @ 1.00g/t Au for 48.5koz Au (indicated resource).

This would represent 1.29mt for 41.7koz Au (31.2koz net to Exco), if you take the 86% conversion rate from indicated to reserve that was used at the start of the project.

That would allow for about six months mining (at 200k/t per mth), which is in line with the current quarterly of mining until Nov 2011.

The ore can then leach for a few months, once placed onto the leach pads, but I guess that production will reduce over time, when ore is no longer being placed onto the leach pads.

Current quarterly says production until mid 2012.





So by these calculations we can expect between 31.2koz minimum, to 56.9koz maximum, (net to Exco), from White Dam's Main Pit.


"The current plan is that mining from the Hannaford Pit will continue until November 2011 and gold production will continue until mid 2012."



I'll let you work out how much this may be worth to Exco.


cheers