Gold In Canadian Dollars

The gold price in $CDN shows that the average realized price in terms of Canadian dollars won't change much for the Q1 report, due at the end of September. So using the average price posted by the company is not such a bad idea.

Costs quoted finally in the news release by the company are roughly half the average realized price in terms of $U.S. You can draw a simple analogy to suggest that the company will not be showing a loss for fiscal Q1 2012, but that the payback period will simply take longer, due to the immense amount of capital thrown at the project in fiscal 2011.

But once August hit, the gold price advanced manfully in terms of $CDN. So you can expect that average realized gold prices in terms of $CDN will show very good results for Q2(which has already started in August). The lazy transition to 700tpd. production will probably follow on permitting being settled.

Expect support at the 13-week EMA and sideways trade in bullion for some time, as short term rates remain at extreme lows, and indecision in the markets takes time to chose a direction.

So let's say you take an average realized price in terms of $CDN of $1650/oz. It would take as many as 30k oz. of production to pay back the initial investment of $50m. Q1 + Q2 + Q3 of fiscal 2012 into January 2012?

And what about the contradictory claims in the Annual Report that the company anticipates having the finance futher and that the goal is to finance growth out of production?

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-F6