its a waiting game ..., page-31

Skim and others,

It doesn’t take long for these threads to deteriorate into being territorial. I was aware of the article you posted and the blog attached to it by Simon Maev. It was dishonest for him not to acknowledge that he was the then CEO of Laurus Energy. This was a company founded by Blinderman (Ergo Exergy) in 2002 or thereabouts. Laurus was set up with the sole purpose of creating UCG projects for Ergo to consult upon.

Hence, my point is that the blog is far from independent. Closer research will indicate that LNC made early indications that they were downsizing the Ergo role at LNC (because they had decided to go inhouse) and Ergo recognized that the writing was on the wall and subsequently resigned.

Were they or would they have been sacked? Who cares. The more important point is for you to look at the production figures at Chinchilla and confirm whether Ergo had produced “commercial” volumes of gas (as claimed by Maev in the blog) during their 30 month trial. My analysis shows that it was not commercial and was most likely a factor that caused Ergo and LNC to part ways. Did Bond underestimate the cost, time, effort and skill to build an inhouse capability? Probably. Was it a good move in my opinion? Yes, because lump sum and royalty payments would no longer be payable to Ergo (Ergo has different arrangements for individual sites and regions) and it is also positive from a business continuity perspective.

Anyway, all of the above is largely history. More important are the current production figures produced by Blinderman/Ergo at Majuba in South Africa. If anyone can point me in the direction of some I would appreciate it. If they are reaching commercial volumes I would consider buying some CXY. I would be a lot happier if CXY would dispense with all the talk of large scale electricity production (200-400MW staged). Some of the proposed project development timetables I have seen are misleading and unlikely to eventuate unless Government approval is provided earlier than currently indicated (Dec 2011 – Dec 2012). By the time cabinet submissions are completed 2013 is a likely construction start date assuming government approval is provided. That would suggest 2014 production and revenue. I would prefer a CNX type approach involving small scale production that will fill the time gap and reduce the technology risk ahead of larger scale production. Perhaps there are some smaller scale production proposals and I have missed an announcement. If so, please let me know. I’d appreciate it.

Cheers