The Komis Mine

Komis mine results discussed only in the MD&A reveals the company intent of reverting to an open-pit scenario. Probably has a lot to do with recent drill results published.

But what that means is the underground plan has given way to a much lower grade open pit mine. What that also implies is that the processing rate could possibly have to increase much more than anticipated. (approximately double slated for Komis) This can also have a direct effect on total ounces produced.

This development flies in the face of earlier published technical reports and prior work done on the Komis. So we have yet another open question as to how Komis fits in, along with whatever they've been doing on the Lloyd mine Its obvious now why they wanted people to see their drill results.

So if you have ~300tpd from Lloyd and ~700tpd from Komis(mostly) + EP averaging 7g/t. This is the same result as 10g/t @ 700tpd. There's lots of coarse gold in Komis, so recovery by gravity for this portion should be very good.

They're saying 500tpd now with Lloyd and EP, so 350tpd Lloyd, 150tpd EP, add 200tpd. Komis open pit. Could be something like 8g/t. For 70koz./year you would need 8.5 g/t. Or to match the outlook, you would require 5g/t from Komis open pit with the present processing rate fully utilized. (I don't think this is outlandish.)

But no word on mill upgrades. So if you have 700tpd, then you can expect anywhere between 62koz. - 70koz. depending on the mix. (which is the outlook.)

Having a higher gold price will make it all appear worthwhile, though right now having read through the material, I have to say this is just another disappointment. But then again, Komis underground would be a disappointment @7 - 8 g/t.

This still leaves some room for Golden Heart, which if it produced 300tpd @ 9g/t would achieve 100koz. production. eventually.

By that time, you can assume a much higher average gold price than $1800/oz.

-F6