agm highlights, page-73

Hi
After sending my e-mail on Friday to Andrew,I had a prompt response that afternoon. Please see below his answers to the questions I and others had on Wonarah. These should hopefully remove some uncertainity and assumptions discussed on Hotcopper last week.

Dear Andrew

Unfortunately I could not make the AGM on Wednesday, and after reading some responses from the meeting, I would appreciate some clarification on the following points that I and other shareholders request answers for:

Q
Since most of the Wonarah samples have been analysed for P2O5, I assume they were also anlaysed for impurities such as Fe, Mg, Si and Al at the same time, (similar to what POZ did), as it wouldn’t make sense to analyse the samples twice? Therefore what readings were reported on the impurities? Was there any U in the samples? If so, what concentrations?

A
We are doing assays for all major and minor relevant elements as part of our studies. With respect, issue of part sets of data in the interim can be misleading, and can give away commercial advantage. It can also lead to potential problems when data is presented in isolation – for example, the data you refer to seems to have high silica, but they are saying that they are looking for it to be reduced during processing. Minemakers considers it better for all to release full data on the expected product, not how it reports in the ground. Having said that, we are pleased with the assays we have compared to published data from other sources. Uranium is very low and will not be an issue.

Q
With the proposed bulk handling facility at Tennent Creek, has there been any tenders for this and designs proposed?

A
NA. It will be built by a third party, and his proposal has Major Project Status from the NT Government

Q
Is it realistic to assume the NT government can upgrade the port of Darwin by mid to late 2010 when MAK will start mining? Has the NT government given some project time frames for this? As I cannot see how a local government project of that size, which is currently in the conceptualization phase, be completed by mid to late 2010.

A
NT Government is not local. It is in receipt of a Master Plan to expand Darwin Port and both the Chief Minister and the Treasurer (also the Minister responsible for ports ) have advised Minemakers that the expansion will be completed in time under the their Major Project Status Plan: it is not a huge task anyway.

Q
Legend’s proposed beneficiation plant costs around 228 million, even though we have a smaller operation is it more likely the CAPEX of MAK’s beneficiation plant will be north of 150 million?

A
I am not in a position to comment on Legend’s. As stated at the AGM and the ASX Release that went out with it, our CAPEX and OPEX for a full beneficiation option will be released in mid-December when we are in receipt of it from Lycopodium Engineering and Coffey Mining. DSO and other options would be much cheaper, of course.

Q
Is it also necessary to announce the delay of the scoping study to the market?

A
We just did this week, Stephen – how else would you have known about it? The important thing for you and the market to understand, and for Minemakers to get across, is that our great results to date at Arruwurra have necessitated a huge expansion in the scope of the study. The original study was for a deeper and hence more expensive mine and processing operation centred on the Main Zone. We are now also looking at two alternatives for Arruwurra also in the expanded Scoping Study, because our drill results ther have exceeded our expectations and hopes. The first is for a shallower mine there, and incorporating processing, so it will be cheaper for both capital and operating. The second is for production of Direct Shipping Ore , which would incorporate even lesser OPEX, and much less CAPEX, and which could get us into a mining and cash flow situation much earlier. The studies are being run in parallel, and even if we need to revert to Plan A at the Main Zone, we will not have lost any time between now and start of production.

Q
When estimating the potential profit from Wonarah, is it safe to assume that RP prices will be around the US $300-400/mt mark and the AUD will be in the 60 – 70c range to the USD?

A
MAK is not in a position to predict future RP prices. However at the meeting, I gave the reasons why we believe the price is more likely to be strong than weak, because other parties’ planned expansions or start-ups are likely to be cancelled, deferred, or cut back due to their generally high CAPEX costs as and the difficulty that funding them is likely to present in the next few years due to the world financial crisis.

We have no way of foretelling future AUD/USD exchange with accuracy, However, as AUD is seen as a commodity based currency, and commodities OTHER than phosphate are likely to be weak, we expect the AUD to be relatively weak. Certainly the current situation favours MAK enormously. As people still need to eat, and there are more of them every day on the Earth, this is seen to underpin future price strength, given that there is now likely to be less additional supply coming on the market. As in the next answer, we will be doing sensitivity analyses with respect to costs, prices and exchange rates and getting the numbers to the market in December..

Q
When the CAPEX, OPEX, and scoping study, are completed, as a share holder representing other concerned shareholders, we would like to be presented with a range of scenarios from the worst case to the best case, which includes RP and currency variations. While many shareholders believe there has been great communication from MAK, they are skeptical about the company is being too optimistic on the potential profits and time frames of the Wonarah project. This issue has been exacerbated by the fact that in the past many juniors have promised to deliver great projects but failed. Providing these scenarios will also help reduce the uncertainty over the project which share holders are experiencing at the moment.

A
I can assure you that MAK’s Board and management are totally committed to this project, and to maximization of value for shareholders – PARTICULARLY the current ones – and we want to sanely work out the best development route in terms of costs and rewards. We will be putting out values for the project and their sensitivities to future prices and AUD values. We are still on track to be in production, with full processing, by the end of 2010. If we can do DSO, it should be faster. You are right that many projects, both large and small have come on stream late or over-budget over the last few years, and whether owned/managed by majors or juniors, and this has generally been due to the commodity and construction boom. The bursting of it will do no harm for MAK. Some examples: the lead times for fabrication of major items such as ball mills has fallen dramatically; suitable second hand gear is now becoming available; drillers are now calling us looking for work; we may be able to buy villages from the receivers of failed mines, etc.

Q
Finally, what happened to the metallurgical testing of the samples from Moina, as these were meant to be available by Q1?

A
As presented in earlier releases, we were let down by a change of management by a European potential partner in the first place. A second round elsewhere has been reasonably encouraging, and we drill for more core at Moina before Christmas so that we can undertake the appropriate testwork programmes, under our new Metallurgical Manager. It is interesting to note that the price of fluorspar is still at record heights despite the much depressed level of all other components at Moina.