compass shorts, page-9

Olympian,

Don't know if I would classify that as old news. I am still trying to find out what could have pushed the schedule out by a further 6 months and increased the costs by 30%.

This sort of blow out does not sound like a construction slip but more like a design f**k up. Having dealt with many so called expert consultants I am of the understanding that a consultant will produce and tell the client what he wants to hear and not always what is correct. A contracted project manager / construction manager will build what is specified on the contracted drawings / documentation.

So if you have contracted one of these expert consultants that does not question the clients thoughts and processes then at the end of the contract the client has a set of documentation that is exactly what the client wanted. It is exactly what the client wanted but does not reflect the true scope of the project in question - a working set of construction drawings.

As I am not privy to the contract details but have read in previous announcements detailing that second hand equipment was purchased and therefore assume that this equipment would have dictated the design. In effect I can see the client "cmr" in this case dictating to the consultant that we want this piece of equipment in the process, we want this specialised sub contractor to undertake this particular works etc and in the end there would have been so many shortfalls in the contract as to where each contractor works begin and end. This demarcation of works or a clearly defined scope of works is where I believe the additional costs have arisen from. But this is just speculation on my behalf as the company has decided to sweep this information under the carpet and only let a privileged few know.

Let’s not forget that we have already had a 3-6 month construction slip due to supposedly the "power" not arriving to site as scheduled and when this was announced everything was still running on time and budget. From memory we were just waiting for the power to arrive so as to commission the plant. In effect we have a 12 month blow in in construction and a 30% price increase with a vague explanation of what went wrong.

This vague explanation is still fresh in the minds of shareholders and investors a like. I will consider and classify this as old news when a clear explanation is given as to why this delay and cost blow out occurred.

Right now we have the board of directors in china discussing the JV and someone or something has just shorted 400K in shares. Will this also be classified as old news once the not so privy investors find out . Cracks are starting to appear. Cover ups are the order of the last few months with very little substance. Do I look at the positive side and assume that this is an orchestrated bad news period designed to allow for the bigger fish to get set or do I be pessimistic and sell all my shares and conclude that management might good as exploring but total f*ck ups when it comes to construction.

Btw is there any penalty clauses in the agreement with re: to delays. Are cmr going to have to pay hnc penalties because they did not deliver the product on time.

I still hold but me patience is wearing thin. I personally would prefer an announcement detailing the technical aspects that went wrong during the construction. Even if this announcement is so technical only 0.000000000001% of the plebs understand its content. I don't mind paying for unforeseen costs as everyone one is human and when comes to designs it is very easy to not place importance on what is perceived to be insignificant at the time. But this lack of information to me feels like management is assuming that the majority of holders are ret*rds.

I think your prayers to Zeus are falling on deaf ears. Instead of a lamb for the spit we will be dining on gutter rats. Or better still maybe we should offer one of Teflon coated directors as a sacrificial gift to the gods. This ship is sinking, who's going to plug the holes.