Ann: Trading Halt , page-4

One of the challenges for operating Coyote has been the keeping the mill turning 24x7. Shutting it down and undertaking deep maintenance is well overdue. Many of the cost issues have been due to unscheduled maintenance and outright plant failures. My speculation is that operational mining will be put on hold and all the focus will go to getting Kavanagh development decline completed ASAP. You are probably right that this was most likely the plan all along.

A carry over from the previous bad management practice was the axiomatic belief that the mill had to operate 24x7. Mining and Operating are huge distraction from developing and exploring. Kavanagh has massive potential if it is done right. The grades are such that the costs will be a fraction of the current costs (well sub $1000 per ounce) with 80% recovery from the gravity circuit.

The market has punished the gold miners of late for good reasons. Many have focused on top line ounces rather than bottom line profit. When the gold price was sub $400/oz the successful miners were those without debt that could afford to stock pile and process when they had the right grades on ROM pad in a "stop start" operation. Coyote/Kavanagh has the potential to be a very efficient low cost of production operation however the the other missing link is that to efficiently operate Coyote 24x7 there needs to be some ore from satellite tonnages for blending. There is no stockpile left from Sandpiper/Kookaburra/Osprey so the CIP plant cannot be operated efficiently at present. There are other potential satellite tonnages that can be developed, however these need time to turn on, mined, graded and stock piled.

A pause in Coyote operations to allow the focus to get Kavanagh developed is one of the tough decisions that the company must make right now to reduce costs without delay.