via SEDAR - Q2 MD&A

source:

http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00007862

The Q2 fiscal 2013 MD&A Dec. 21 has some notable changes.

Firstly, there is no 'going concern' statement. That means the company is not in dire financial straights as you might have believed after the Q4, fiscal 2012 report.(or were led to believe)

Grades for the Roy Lloyd mine over the period of Q2 are discussed, and they are better than those anticipated in the "fact" "sheet." Grades are diluted by the processing of low grade development muck ores below cut-off grade along with ores from the shrinkage stopes. (why don't they just say it that way?)

There have been some IFRS accounting changes, which I presume to have to do with issuing debt instruments and determining fair value of notes and equity. These should not be ignored, because if the company borrows money, or issues debt, then risk assets(meaning derivatives) will arise out of those dealings, but pertain to the company's risk.

The non-IFRS measure of cash costs have remained far below the spot gold price through the curtailment of production in 2012. Losses are probably attributable to amortized costs or depreciations rather than the financial viability of the company. (Its very important to make this distinction.)

Overall, I am thinking that a wild, sudden drastic curtailment of production while spokespersons insist that 'everything is fine' is not likely to occur in the future, but that the picture of the company is still one of piecemeal and limited presentation, until we see a financing for a new mill, a new NI-43-101 is issued for Komis, or Golden Heart is finally in production.

I suspect that it really means we are waiting at present for a higher gold price, even though the gold price has remained well above cost.

-F6