Ann: Update: Dispute with China Rail Resource , page-16

Herc,

You make a good point. Other companies have looked at these assets with interest. The Canadians who have now bought Ravensthorpe now own a nickel laterite similar in scale and grade to Young and apparently are only planning to modify the in-going material logistics rather modify the high tempertaure, high pressure process which has brought down several nickel processors so far.

Shareholders will recall that apart from some sweet spots Young's grade is lowish, but cobalt credits and location bring it up a notch, possibly to 1- 1.2% equivalent or more.

If a process can be found which minimizes acid cost by, for example re-cycling 90% of the acid and consequently substantially reducing the environmental cost and footprint, Young could be quite a sexy asset.

As there are 2-3 candidate processes which offer high thereotical potential, the game is far from over. One I've seen at first hand may cut operational cost by 50%. The process inverts many of the assumptions used by the industry) The developers suggest costs falling by up to 80%, but that is a very big claim and would need to be proved in a pilot plant.

So shareholders who shake their heads in dismay can take some minor comfort from the fact that there are people working away at technologies which could make a large difference to Young's value if the owners of Young can procure this process (once proven) at a reasonable royalty cost.

But pulling this off would require alliances and/or access to substantial funding and in the view of many dispassionate outsiders, a different mind set. Setting aside the particulars of this situation, a company operating as a small quasi-explorer, qausi-developer, run operationally as a family company or at least a very inward looking outfit, and not linked into either the big end of town or the big end of the market (China) is inevitably going to find the going tough.