Ann: Annual General Meeting - Presentation, page-13

Slentik - thanks for your observations. Holding the AGM in Perth and not live streaming makes it pretty easy to avoid shareholders so being one of three makes you pretty unique (in a positive way). That said, the "feeling" you observed about the board being optimistic is one of the reasons why I like to turn up to an AGM. It is not what is in the Chair's speech but how they say it. Also better to over deliver so the fact that they didn't say something like "volumes, quality and prices were softer than the previous corresponding period." is encouraging - often what is not said is as important as what is said.

Another interesting point is the fact that they noted that no other pearl business have to report their results publicly. Which dare I say is one of the reasons private equity has done so well over the past few decades whereas the number of ASX listings hasn't been as spectacular - which is a story for another day..... In any event, I have been talking to a number of people connected to the jewelry industry about pearls and their feed back hasn't been much of a surprise. Namely:

• Price of pearls has skyrocketed.
• There is a real shortage of supply.
• Chinese demand for "hard" assets is driving the demand.
• Last time there was excess demand for pearls the suppliers took steps to increase supply which inevitably led to excess supply and prolonged periods of depressed prices. This time the suppliers are taking a wait and see approach to determine if the demand is permanent or a passing fad. They don't want to invest the profits they are generating in assets that won't generate a return in the future.

We shall see what happens but it does seem that pearl producers are in the middle of a very rich vein at the moment. May it last.

Best

BSP

NFA, DYOR, GLTAH