Great analysis thusfar, everyone. I've had the opportunity to digest the financials today and as aptly put by hopespringseternal, 'it feels like we've received an "F" on an exam we thought we did well on'.

Still, there is plenty for us to feel encouraged about.

We're still at the beginning stages of our journey to being a producer and if the path was easy, more companies would be making the transition. We're left to decide for ourselves what the many pitfalls were that Liberty encountered in Q4 that trimmed back production and drove up costs.

Despite the accruals/amortizations and other costs that drove us down to a $4mm net loss, we did make cash from mining operations in Q4. Not a lot, but it is encouraging nonetheless.

It is clear now that this latest round of expensive financing is necessary to provide working capital to carry us through to higher levels of production with McWatters. We are in a bit of a precarious situation until that happens, as we draw down from this cash and accrue an expensive 14% interest payment for next year as well as face a cost of 25,000x200x$0.40 = $2,000,000 if share price is not $2.50 or higher in one year to purchase back the warrants. It is key that by this time next year we have ramped up production to near our capacity. This creates cash, allows us to pay down this debt and makes the decision a sound one. Alternatively, if delays cause us to push out our full production date and suck dry our cash reserves, we will be making some very difficulty decisions later this year on how we are going to raise some short term working capital (share issues at a low price, even more expensive debt, etc).

I don't expect Q1-08 results to be much different than these financial statements report... or Q2-08 for that matter. Time will tell how Q3 pans out, depending on how McWatters comes along. If we can indeed drive down our mining costs to less than $3.50 per pound, then we're home free in 12 months.