Focused on Commencing Gold Production

TRENT ALLEN, Resource Capital Research (03/30/2010)

"Key investment points:

  • 100% focus on commencing gold production at Morning Star Mine, Woods Point, Eastern Goldfields, Vic.
  • Historical production at Woods Point underground mine 883,000 oz at 26.5g/t from 1862-1963.
  • Mining has commenced at Morning Star, for the first time since 1959 (WMC), with ore being stockpiled.
  • MCO has spent >A$28m and more than a decade rehabilitating and re-building the Morning Star mine to level 10 (310m depth).
  • Production grades are exceeding resource grades - average reef in 4Q09 was 22.95g/t Au with grades now increasing (recent 44.4g/t from 26 ore zone samples)
  • An ~80ktpa gravity plant is under construction and could be operational in Jun '10. MCO expects to be producing gold at an initial level of 15 - 25kozpa Au
  • Underwritten option exercise 1Q10 is injecting A$12.3m."

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