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## Mine Development 

Selinsing mine development commenced in October 2008 and was completed in the first quarter of fiscal 2011, including the mine site and camp development, the 1,200 tpd gold treatment plant construction and the tailing storage facility development with capacity to store a 16 month tailing discharge from the processing plant. The plant was fully commissioned and achieved commercial production in September 2010. The cost of plant construction and mine development totaled $18 million (CAD 17 million), comprised of $21 million (CAD 20 million) expenditures, offset by $3 million (CAD 3 million) revenue generated from gold sales prior to commercial production. The approximate $3 million (CAD 3 million) overrun resulted primarily from the delay in delivery and replacement of the CIL agitators. 

## Production 

First year commercial operation produced 44,438 ounces of gold, 11% higher than projected mainly due to higher feed grade and recovery of the ore materials compared to the budget. Mining and processing operating results as at June 30, 2011 are provided as follows: 

<img src='content_image/136378.jpg'>

$_{(1)}$ Total cash cost includes production costs such as mining, processing, tailing facility maintenance and camp administration, royalties, and operating costs such as storage, temporary mine production closure, community development cost and property fees, net of by-product credits. Cash cost excludes amortization, depletion, accretion expenses, capital costs, exploration costs and corporate administration costs. The Company pays 5% of gross revenue as a royalty to Malaysian government. 

## Project Development and Phase III Expansion 

Phase III expansion of the gold plant estimated at $8.1 million is aimed to increase capacity of the gold treatment processing plant from 400,000 tpa to 1,000,000 tpa through installation of an additional crusher, a primary ball mill, three leach tanks, and other improvement to the gold room, detox circuit, tailing pipelines and pumping system. As of June 30, 2011, the Company completed major engineering and metallurgical design work and engaged pre-qualified contractors in supplying critical heavy equipment such as a new ball mill and leach agitators. Total costs incurred to June 30, 2011 were $252,600 and a total of $626,847 was paid in advance to suppliers to initiate the contract work. 

