Ann: Quarterly Activities and Cash Flow Report 31, page-3

re: Ann: Quarterly Activities and Cash Flow R... After the final loan documentation for US$6m is the following paragraph:

"The ATC Ferrotungsten Project remains on stand-by whilst funding is arranged to procure all feedstock and first fill required to commence production. Funding negotiations suggest this will be achieved via a combination of debt and equity. The Company has been working with its advisers at Hartleys to achieve this outcome".

This indicates to me that the $6m is insufficient for start up and production up until sufficient income is generated.

First fill including the liner was costed at $3.5 million in March 2010 (so it's probably more now). It was also stated that "Around 90% of the operating cost is due to feedstock".

However the main concern for all of us is that the Company keeps indicating that things are happening in the background (whitewash)when absolutely nothing is happening where it counts ie production in the brand new white elephant.

I note that the first mention of the $6m funding arrangement was 15 Sep 2011 so it's taken 7 months to finalise!