Ann: Term Sheet for Works Contract on C4 Iron Deposit Executed, page-22

G,
To give you a proper, much less smartarse answer, the whole deal is about becoming profitable without too much share dilution. If you read it the agreement again, Pilbara are taking responsibility for their own capex, yes we are paying them market rates for their opex, but they are covering their own capex. This gives them ‘skin in the game’, which has earned them 30% of profit and has saved GWR, millions of shares in cap raising if we had to buy our own equipment.

Keep in mind that this agreement only covers a small amount of the total deposit but will raise easily enough money for us to go independent with the rest of the resource should we choose to. GWR have reserved the right to call the whole thing if off if profitability falls below $10 per share, so worse case scenario while mining is we make $7 million per tonne profit while Pilbara do all the work. One of the sureties we are giving Pilbara is in iron ore not money, again saving on costs. We intend to use a nearby miner’s facilities instead of building our own, again to contain costs.
Since Adrian has been in charge one of his main themes is to contain costs and this deal is a fine example of his work. We will need to raise money soon, we could sell our EMT shares which would only raise pocket money but would keep the office running for another year or so. We could sell TGN shares but they recently went on a run from 10 cents to 30 cents before settling down around 18 cents. Something going on there and I would be reluctant to sell them in the next little while.
Getting from explorer to producer with as little dilution as possible, you gotta, like that. Sp down today an indicator of the market not fully understanding our strategy, but it will come round to our way of thinking sooner rather than later.