Ann: Significant Upgrade to K2 DFS, page-9

Hi Wazzooo,

Hope you are keeping well. I've said this in the past - mgmt are not short of will. The will to make this a success and progress assets to a conclusion is there, however its not a battle that they can win in my opinion. The obvious events of the past have made obliterated any case for investing in this stock. Mgmt salaries and packages are absurd, regardless of participation in recent raisings.

Not counting any options there are 2.7B shares on issue. In its most basic form ORD will have 45% of the Plutonic project at the end of the current 1M spend. 45% of the current NPV is 6.6M which equates to $0.0025 per share. The numbers get bigger depending on ownership figures. The current price is $0.002 per share so the stock looks cheap, but who has a substantial holding on an average of $0.002? Not many.

The reason why the project doesnt stack up (regardless of your average) is because the NPV is based on 3-years mine life. Assuming the company returns 100% of all earnings then you'll get back exactly what you bought ORD shares for ~$0.0025. Again not many are at this price. Its doesnt make sense - yes you'll get some return but nothing to compensate for investment (i.e Return on Equity/Investment). The other issue is that 3-years implies, 3-years LOM (life of mine). Even with a return of $0.0025 after 3-years, then what? ORD will have nothing as it has distributed all earnings and LOM is zero.

The project starts to make sense IF LOM is extended. i.e 10-years. But you cant extend LOM without further drilling to extend the resource and further CAPex to develop the mine. This means more CRs and further dilution (lower ROE/ROI). The other issue is that the DFS is based on a lot of 'resources', as opposed to 'reserves'. This adds risk to feasibility. ORD makes mention of 'financing' discussions - so either debt/equity/hybrids. In some form SHs will be diluted - i.e even with debt financing (servicing costs will have to be paid from mining profits instead of all profits being distributed). Also a $1400/oz POG($A) looks optimistic to me. Its currently at $1382 ($A) but as the world starts to revert to the norm then gold is gonna get dumped. Gold generally trends at USD $800/oz - gold is not a growth asset as many believe. It stems from the fact that gold is not consumed, but hoarder (the majority of it is held by the worlds population as jewellery or in safes for hedging purposes). As the world derisks and reverts to the norm - post GFC era, US rebuilding, slowing Asia - gold holdings will deplete (sold) and reinvested in traditional asset classes. This selling pressure will be no good for gold miners.

In summary, this is why its no longer a sensible investment proposition from my point of view.