indicative cashflow summary, page-2

Cashflow will be pretty lumpy this calendar year due to the cutback expenses at HBJ and Mt Martin (and Mt Marion to a lesser extent). I'm guess that for the remainder of the year HBJ will average a strip ratio of 3-4:1 (though some months it might be under 2:1 and others might produce little or no ore). Mr Martin requires several months of cutback (probably $5-8 million in costs?) before any ore is produced. However, based on the January 2008 SRK report, HBJ will produce over 2.6 million tonnes of ore in the next 24-30months. Realistically, due to Frogs Leg doing accounting for 450-500ktpa of ore and with other pits and U/G sources contributing ore, Dioro are going to creating large ore stockpiles from late 2008. How they handle their cashflows and how this reflected in accounting (and hence headline profits) I have no idea.

If the remaining extensional holes (particularly those at depth) and the future Tinker dill holes come in with good results, I would be confident, assuming capital and operating costs can be controlled (or gold goes to say $A1100-1200), we would see a economic resource of 1 million ozs at Frogs Leg. It would be interesting to see, if that was achieved, whether a second portall might be installed to raise output to say 700ktpa (110-120,000oz). This might cost $20 million, plus additional equipment etc. A decision on this would have to be at least 12 months away.

Just my speculations.

angus