Valuing ARU, page-4

Thank you for taking the time to put your model down and the explanation. I can see the time and effort you have taken.

Two items I can add;

1. the cost overrun built into the project is at circa AU$600M. That’s a massive contingency, that the government has built into this project. Maybe their experience with ILU has taught them. That being said, ILU all looked rushed, whereby we have had advanced FEED lasting over 18 months to ensure no budget blow out.
2. As you touched on above, managements tranches/milestones, for remuneration, in particular are aligned with our goals. Ie the second milestone in particular is dependent on the debt drawn down without a cost overrun.

This means, although we have the cost overrun, they won’t want to use it.

I dived heavily into the managements remuneration and had several meetings around this with ARU. In particular Darryl. I was very blunt/frank with my assessment, and on coming out the other side I am very comfortable the executive remuneration is aligned with us shareholders.

If we have success, then management will succeed.