Ann: Shareholder Update 16 October 2009 , page-26

OK Personal disclosure first. I’m an optimist and generally take a stand from where I am now looking forward on the information I have available. What has happened in the past adds to my experience in making my investment decisions including buy hold or sell.

Trying to pragmatically look at the announcement lets see where it sits in the scheme of things.

1. Plant refurbishment: All I can get from this paragraph is that it has started.

2. Briquetting system: I’ve done a quick literature survey on why this might be so important. It appears this area has given a lot of problems around the world and much of that is due to the feed stock used. You can see what Chavez has done in trying to fix his country’s DRI plants. This may be why the CSIRO is involved, partly as an independent assessor of the quality of the ARI briquette and it’s make up. I had a conversation with the company about them making a new standard called Austpac Reduced Iron or ARI vs DRI. It comes down to the variable quality of DRI especially when made directly from Iron Ore. The residual contaminants especially silica (I think it was silica) makes the DRI briquettes unstable and variable enough to give problems. Because ARI is sourced from already purified iron which has rusted it does not have these problems. So the ARI is a very high purity DRI and should be able to recieve a premium to normal DRI.

3. Sales and Supply agreement: APG had originally nominated August for the conclusion of this. Trying to read between the lines I would hazard a guess that the supply side is going to be locked up with the sales side. I certainly wouldn’t want to be committed to taking a lot of spent pickle if I wasn’t sure I could sell a lot of the resultant acid back. I wouldn’t want to compete on the open market against the big suppliers so the agreement may be locked up with the Briquette supply. I assume the company wants to get that locked in. A question for the AGM I think.

4. New applications of the technology: This just says to me they have been marketing (by whatever means) their technology potential and it is working. Direct approaches from steel mills means they have alternative expansions options to the Multiserve option. Unfortunately not enough information as yet for Fergus to do his sums and see if it adds potential value so hibernation seems his correct move there.

5. Licence approvals and Patent applications: The longevity of the original patent and whether all Mr. Winters changes have made the patents new again are questions for the AGM. I would expect management would have fixed this and be on top of it so this is just a statement of fact I suppose.

So that’s the announcement, basically saying that things are making progress but not as fast as many shareholders would want. How does this affect my decision to hold/buy/sell? Nothing has changed in the potential I have seen before, so I still hold. I wanted an announcement updating the purchase/sales agreement that was due in August and I’ve been given the briquetting testing. Not what I wanted but on reviewing it, it is a reasonable reason though I have to infer why the agreements are not complete yet rather than be told.

Stepping back and trying to judge this pragmatically from where I stand now the cashflow is still closer than it has been for a long time and the potential is still exceptional so for me it is still hold with a great deal of patience.

As to the rest of this thread,which is more to do with other things than the actual announcemewnt it has been enlightening and amusing as always, an interesting bunch us APG followers eh wot?

Cheers
Seik