Ann: Lulo Special Distribution, page-54

Guys. here my take on it. The mining of our site has been going great. It was cashflow positive in june 2015 after only 6 months of mining. We are expanding the production capacity and fleet at a rate of approx 100% every 8 months. Current mining diamond sales is coping with this expansion relatively comfortably!

Now its important to remember that where the JV pays all mining cost etc it does not pay any exploration. All exploration is on LOM. We pay all Perth Managements wages and substantial exploration costs from our own account. To date the only thing funding our own account has been the small exploration diamond sales(by special agreement) and also CR's.

If we left all money in the JV accounts for mine expansion we would expand a little faster but we would need to continue diluting our own holdings of LOM through the standard methods of CR's/oppie conversions etc! Our mine would be growing but our holding would be constantly diluted! This way the mine is still expanding and CR's are now a thing of the past imo! Its a MAJOR plus for any LOM holder! Also we build trust with the Angolans and we give them some cash to fund their own(cash strapped because of the oil crisis) organisations, Sodium etc.

Everyone wins!