attn mx-, page-10

MX,
Thanks for posting the chart. It tells us a number of things.

1. Until the 1/2 year results came out, OZL and PNA were in lockstep. The market was treating both CEO's and boards the same.
2. Divergence occurred at the results announcement. Why?
a) the reduced dividend - maybe, but I do not think so.
b) mine life? - My personal view is that the market has grown tired of OZL not doing any M & A or extending the mine life of P Hill. The timeline that OZL is working to is fundamentally different to the timeline that the market is wanting OZL to work to. When I listen to the webcasts, the message comes through loud and clear that TB's main focus is to make sure that production does not stop in 2018. The issue is he is not telling the market how he intends to do that. Again from the webcasts, I can glean the following actions being undertaken by TB all at the same time.
i) extensive drilling in the P Hill corridor.
ii) drilling under the Malu open cut pit to convert inferred resources to indicated and then reserves.

We know that ii) will give a result - whether the result is economic to mine or not is another question. The one big benefit going for the u/g option is that the processing facility is already built and so the IRR has a much lower hurdle rate.

On M & A.

SFR is an option - POSCO is the issue and the SFR share price will mean that any t/o now will be destroying shareholder value. Remember, SFR has a shorter mine life than P Hill had. OZL holding onto SFR gives it the optionality and effectively blocks anybody else wanting to have a go. Alternatively, if someone went for SFR, OZL could pick up the t/o premium. So holding onto SFR is a win/win.

RXM is a very good option. The BFS comes out in Oct. Doing a t/o now is with some risk. Waiting till the BFS is published significantly derisks a t/o. OZL may pay a higher price, but the downside risk is much less. Any mining venture is risky, all miners want to reduce that risk as much as possible, otherwise it is money down the drain. (Look at IGO and Jaguar t/o for an acquisition that was not derisked.)

At current copper prices, OZL is very profitable. This half will see little expenditure in CAPEX and so cash is likely to grow to about $850m.

Am I frustrated at the sp? You bet.
Do I think TB has the best interests of shareholders in mind? Yes.
Do I think that the emotional rants and name calling that have occurred on the OZL thread acceptable? No I do not.

Some posters have a view that they are hard done by. Well, may I suggest that they look over the fence at KZL holders or HST holders or MST holders or MCO holders to know what hard done by really means. OZL is profitable, it is generating positive OCF, it has a healthy (actually pristine) balance sheet. Maybe OZL holders should be thankful for what they have because there are shareholders in other companies in a much worse position than we are.

HT1