update, page-14

Mose

Corporation Law requires VA to told creditors meetings at certain times after being appointed - 7 days then 21 days for second meeting. There is a lot of work to do for a VA of this size so not uncommon for a VA to seek leave of the court to defer the meeting. In this case we have a receiver & manager being appointed which in effect supplants the VA appointment by taking control of the assets they hold security over ( some RM only have limited powers over certain assets and directors can operate the company besides that asset ) in this case the RM ( appointed by Macquarie ) controls the lot due to the nature of security they hold ( which is common ) . The receiver does not have to provide any updates to anyone , other than the ASIC , every 6 months they are required to lodge details of cash collected & paid. There is a general duty they owe to other creditors & shareholders to preserve equity by seeking the highest possible price for the assets . Their is nothing stopping them from selling assets tomorrow if the right offer came along , however the RM would be foolish to just accept enough to clear the secured creditor if they didn't take all reasonable steps to obtain the best price- especially if his asset is generating strong cashflows that would clear the bulk of the amount they are owed in 2 to 3 years. They have engaged a merchant bank as they know this is a valuable asset & are bound to get the best possible price - the rest is up to the market.

The deferment of the second creditors meeting is nothing sinister - the meeting would most likely only run for 10 mins and give not much away as the VA isn't running the assets.

All in all , we are in for a wait - no amount of ASIC / class action activity is going to change the timing for this - for those that doubt this , you may want to do some research about the Beaconsfield gold mine in Tas - ALX & BCD - this mine was run by receivers for a very long time - they work to their own timetable . I won't go into details here as the whole thing is very long & sordid and I believe shareholders were really poorly treated & the ASIC did SFA.

I remain hopeful that value remains in these assets - however my optimism is tempered by what are very tight credit markets for someone to fund a potential purchaser - my belief if the thing is throwing off cash it is very hard for RM to justify a quick fire sale.

Last point - I have been through he last few presentations by CUO. It is a very long bow to draw that they misrepresented their financial position . Sure forecasts looked good ( very good in fact ) , however were accompanied by assumptions as to price / exchange rate and covered with the standard disclaimers at the front . Most of the announcements related to operational progress at Lady Annie and the good progress being made - no-one has suggested that they lied in respect of this - the act a receiver can ran a mine at full capacity shortly after being appointed proves this. Debt disclosed at last quarterly is roughly in line with what has been reported at creditors meeting ( unsecured is additional to this and is not reported in quarterly ). If they had stated that the mine was running great and the receivers walk in and find it is a complete shambles & producing nothing like was claimed and was a complete dead loss , yes you would have a prima facie case - as it stands it will be very difficult to prove they misrepresented their prospects.



Cheers

Baraka