Ann: Quarterly Activities Report-SDL.AX, page-7

Things are certainly on a knives edge...a lot of promises, assurances and support for the project but we need these to be turned into contract signing and funding agreements....by all accounts Management seem to be getting feedback from China and those involved in the direct negotiations, that things will definitely happen....but again we need this feedback to materialise into actual content.

China are intentionally dragging things out maybe as a strategy so they can come in and make a low ball offer for the entire company. Cheap Cheap…If they are saying there are funds available in China for the project and they support the project and want it to happen then what is holding things up. IO prices are above SDL Break-even point and projected IO prices continue to improve and stabilise. However, it is a buyers market and in theory China can afford to take its time. SDL has other mineral resources its tenements.

When China provide the funding, as well as the interest earned, the majority of the money will in theory go back to China when they hire Chinese employees and companies to build the mine and infrastructure. They are continually saying they have a strong commitment to Africa and funding infrastructure, hmmmm...the main reason is that they will directly benefit.

It is good that;

• Congo convention ratified, project conditions guaranteed for next 25 years.
• Funding for the project is available in China and support for the development of the project exists.
• Cash savings measures have been implemented. I would think that the projected admin cost of $2million next quarter would involve maintenance of existing contracts and leases, pay out of existing contracts and leases across 3 countries, further redundancy payments. They can’t shut up shop completely as they need to be ready when things turn around.

Cash position is a concern and they need to ensure further cost savings....as long as they continue to receive support from debtors...

For me, although I have all but written off this one as an unrealised tax loss, and has been put in the top draw, there is certainly some glimmer of hope.

I have been watching the trading very closely for some leaky ship trading, I suspect that the 52million sold for $211k the other day was Porter.

I would like to see the company provide a monthly update on the project from here on.

U-DYOR