Ann: PanAust to acquire majority interest in Frie, page-11

re: Ann: PanAust to acquire majority interest... Been quiet for a while, but thought I would put my 2 bob's worth in.

Sovereign risk in PNG is huge. PNG has just taken over OK Tedi by doing a Zimbabwe and passing a law. It was owned by the people of the region. So the PNG govt appear to have "stolen" from their own people.

This acquisition has similar parallels to OZL and C. The cost of the acquisition is not the issue - it is the Capex to get it into production. JV's may be able to help here, but CAPEX costs normally go only one way.

On balance, I would regard it as a high risk move. If PNA can pull it off, then the rewards will be great. The downside risk is just as large.

HT1