Cashflow will be pretty lumpy this calendar year due to the...

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