blink and you might miss it, page-45

Hi Transit

Welcome aboard. In a nut shell...

From what I understand it boils down to the basic management accounting concept of fixed costs and variable costs. Mining operations of this nature have high fixed costs per unit of production (and even higher if you have an incompetent contractor bleeding you dry!), large workforce, equipment servicing, mill etc.

So, for instance if the last two quarters had tonnes milled of 99,586 & 70,359, but the company was targeting 180,000 each quarter, you can soon see where the money was burnt (when measured in terms of production).

All the lost days of production and starting and stopping the mill due to strike action also reduces the efficiency of the operations and the recoveries.

Now from what I understand as management ramp up production and focus on efficiencies and mining discipline then the average Cash Costs should fall.

At the time of taking over the operations, management also suggested that they were targeting cost reduction in the range of 10-15%. Which I would expect to start taking effect in the current June 2012 quarter - as you'd probably assume there would be some one-off costs involved with the change-over?

As far as the Refining goes. This is undertaken by Impala Refining Services as part of an offtake agreement - which I think means they operate on a percentage of volume.

As a longer term investor myself I'd be interested in hearing about what you are able to dig up and find out as part of your research efforts.

Fundamentally and technically the stock feels poised for a big week. I'll be glued to my computer first thing tomorrow - that's for sure!

Gus