rabbits out of hats, page-67

Howdy everyone.

Meeting up with Magix, AUboat, Alan Partridge and others for the first time, as well as sharing company with many regulars, alone, was good reason to make the journey across to the West coast.

It was a bit difficult to compare numbers, due to the difference in room sizes, but I'm sure the attendance at this year's AGM was much larger than last year.

I was impressed with the presentations from Matt, Sten, Barry and Alan. All were very bullish on the short, medium and long term outlook for both the iron ore and bauxite/alumina projects. I agree with Alan Partridge's conclusion regarding the board's plan to fund the bauxite/alumina project with the revenue stream from Railway.

Alan Birchmore remains very bullish on our bauxite/alumina project and spoke very highly of Wenche Agerup's appointment as Project Director for the Hydro/United JV. Wenche has been spending a good deal of time in the Kimberleys, building up relationships with the local indigenous peoples. She has also been in talks with the State and Federal governments. Alan explained that Hydro is long on aluminium but short on its primary ingredient, alumina and it remains very committed to the JV partnership. He also reiterated that the terms of the JV were extremely attractive for UMC.

The main comment I have with respect to the bauxite/alumina is that although it's a long term project, it has the capacity to dwarf our iron ore. That said, I'm sure that the success of the project will very much rely on Hydro/Bauxite Australia's ability to secure a slice of the Mitchell Plateau deposit. Not sure how Mitchell Plateau would fit in with BHP's plan, nor the obligations under the MPJV Agreement Act, if it succeeds with a Rio takeover.

Moving on to Matt - chalk and cheese when comparing to last year's presentation. I recommend you run the Corporate Video on UMC's new website. It's a very professional video and certainly reflects UMC coming of age.

Phil mentioned on a number of occasions that Sten's addition to the board is valuable and one quickly understands where Phil was coming from after listening to Sten's presentation. He mentioned that UMC was looking at a number of development options and as we know, he was unable to elaborate due to commercial confidentiality agreements. Perhaps I'm wrong here, but I get that distinct feeling that UMC could be very close to signing off on some sort of deal but is holding off as a better deal is just around the corner. Given Sten's vast exposure in the industry, it's great to see his eyes light up when the word Railway was mentioned and I take it that he's very excited about <2% alumina value in the fines. "Even if the iron ore price is halved, the Railway project is still attractive."

I noticed that Barry is now referring to Yandi Headwaters as Detrital Iron Deposit (DID) rather than Channel Iron Deposit (CID). When I questioned Barry about this change, he mentioned that are indifferent as both are sedimentary formations. I agree with that statement, however I was of the understanding that typically DID deposits are valued for the high proportion of high quality lump contained within them. At the end of the day, I think Barry will find both CDI and DID at Yandi - fingers crossed that the origin is Marra Mamba.

Apparently, Barry is not at all keen on MGS and explained that a Hope Downs type deal would be far more profitable for shareholders. I'm not suggesting that anyone read between the lines but I will add that I remain confident that we will strike a JV deal with Rio. My personal opinion on this is that considering the current market conditions and Rio still having to service its Alcan debt, Rio may opt to reduce its CAPEX on ramping up iron ore production by negotiating MGS. However, the Railway deposit is that good, UMC will insist on a JV, where Rio funds the majority of the CAPEX and the profit is split 50/50.

Lastly, Mal Randall spoke briefly on the iron ore business. He thinks that UMC is ideally placed and is not concerned about iron ore prices, nor demand. Mal also quoted Twiggy - "All systems go with iron ore."

Lastly, thanks for dropping me off at the airport Magix.

Cheers!