Ann: March Quarterly Activities Report, page-36

Morning Guys,

The conference call was interesting and well worth a listen.

From a layperson's perspective I took away:

Edikan - it seems to me that there are issues with the higher grade ore being correlated with harder ore. This in turn is requiring blending with softer/ lower grade ore in an effort to maintain throughput and cost control. In turn, this is putting pressure on the headline oz production numbers.

Hopefully PRU have this under control and JQ does seem confident that PRU will hit the numbers for FY.

As Nordesmic has said, Edikan has likely only got incremental cost savings to come. Some of this can be achieved through (a) full plant uptime and (b) solving the ore hardness/ grade issue. That is, increasing the # oz produced with the same absolute operational cost base.

Edikan, however, is a highly leveraged play on higher gold prices.

I do worry a little, however, at the increasing oil prices (and for Sissingue).

Sissingue - this seems to be going well, although I did pick up that the head grade from the top of the oxide ore was undercalling, although this seems a common occurrence. The much higher recovery rates, although early days is great news.

The key for Sissingue, to me at least, is to now run the operation with solid FCF and to find more reserves to increase the rather short LOM.

Yaoure - Whilst I still think they blew it, buying AMA for the price they did and then losing one of the projects, Yaoure looks like it will deliver more R&R and a longer LOM than the current DFS shows.

I hear Loki, but am quite pleased that people are being retained from the Sissingue project - this could save many millions in balls-up and time delays.

As per Loki, I have also been investing in this sector long enough to expect the worst, and PRU has certainly not disappointed on that front in the past. My takeaway, at face value, from JQ's comments was that Yaoure's financing will be based around debt + FCF.

Let's wait and see ... it will all depend on (a) Sissingue's operations (b) Edikan's operations (c) gold price (d) capital markets (e) timeline for development.

As I was saying to a friend previously, there may well be a CR for Yaoure, but sitting out now may not be the most profitable action if (a) gold price breaks out like it is threatening to do so (b) Sissingue/ Edikan performance meets/ exceeds market expectations for the next 2 Quarters.

This would result in a possible CR at a potentially much higher price than today's with much less dilution (or not !!).

Cheers
John