Mmmm Whaler perhaps this might be another way of looking at this situation:

Hopefully by the end of this coming week the deal should be completely finished with the American loan paid out and the current payables being addressed. After crunching some numbers looks like there is now around $44M of debt and after the deal there will be roughly $15.5M of debt. To my understanding preferred shares are not debt; yes they have a recurring cost but the principal is equity, not debt. The only debt as far as I can see is the secured prepayment of concentrate loan which, if I read things correctly, will be paid off ASAP.

What I am *Delighted with* is the incredible recovery LBE is getting from a significant bulk sample of low grade ore at McWatters. As Wanderer stated this opens the door to 1 million tonnes more ore to seriously consider.

Here are some numbers to play with. Using an operating cost per tonne to mine the ore with long home mine method of $40/t which includes trucking to the mill; no development costs are in that price as they are minimal due due to my understanding that the ramp and most of the drifting to the additional ore will already be done. Mill cost per tonne is about $15.

Therefore, we have to make more than $55/t on the low grade ore to make an operating profit. Recovery at a conservative 85%, smelter payable at 75% and ore grade of 0.49% gives us 6.88 payable pounds per tonne; break even price is CDN$7.99 or US$7.19 at a 90 cent Canadian dollar.

The world nickel prices going forward need to be at least US$7 for companies to make enough profit to stay alive in the long term. I am hoping that we will see Ni trade in the $7-$10 range for periods of time and when that happens LBE will mine the extra ore when the times are right.

Here's the fun part .... Let’s say we can get an average US$9 during those times. The extra 1M tonnes which can be mined and processed means a profit of US$12.5M based on 1,000,000 x .0049 x.75 x.85 x2205 x1.81. This will be a nice chunk of change when the price of nickel increases [don't even get me started on let's say if nickel prices increase to a higher amount ;)].

Happy Trails,

-B1-