First Asset Morningstar Emerging Markets Composite T.EXM.A

Cash Flow Question

[codetwo]

What will EXM's 30% share of Moris Mine equate to in annual cash flow once production starts in Q3? Thanks in advance.

[mattbigham]

Moris is projected to start with a 1,060 ktpa production rate. We expect to commence production at Mina Moris in the third quarter of 2007 at an initial capacity of 1,060 ktpa.The ore will be processed at a plant which came with the property and is currently being refurbished. Since the operation was initially commissioned in 1996, some of the permits and licenses have lapsed. However, we have

[bryancj]

Cashflow is expected from the Moris Mine in 2007. Hochschild are operators of this mine. See report attached for more details: https://www.eresearch.ca/_report/EXM_121506.pdf

[coach247]

Cash flow comes from generating net revenues that are greater than the cash operating costs. It is not based on the start-up capital expenditures that go into getting a project ready for production. So while it may take 2 years to reach break-even as a capital investment, Moris could still be generating positive cash flow within a few months of the commencement of mining operations. And that