Ann: Non-Binding, Indicative and Conditional Offer Robe River JV, page-43

sorry mate but that seems like wishful thinking. The NPV is irrelevant, it’s about how cheap others can buy the project for and unless there is competitive tension it’s looking like 31c may be it. Rio has showed they don’t want to pay more than the minimum they need to by suggesting they would offer 31c - which is the same as GV are suggesting they offer. Rio probably feel their offer is superior because shareholders keep the gold and other assets. I personally think the other assets are just a potential money pit that can be used by management to justify their wages. The gold prospect is just that at the moment - a prospect with no resource and little to go by. The titanium/magnetite/vanadium project is a dud imho - many of these projects around and as far as I can tell they have all lead to shareholder wealth destruction to date. The mistake I believe Rio are making is they think their offer is superior. I think it’s inferior and would rather the 31c from GV if it eventuates. At least the 31c is going into my pocket not into managements pockets so they can waste it. What is managements record of value creation - not great. If GV come through with a 31c bid I think Rio will have to up its price.

Everyone knows it makes the most sense for Rio to own the project. Now that they have shown they are interested I think they will end up getting it eventually. The important thing for us is there needs to be some competitive tension and Rio need to feel they have to offer more to secure it. My worry is that now that Rio has shown it’s interested the others will give up and not bother trying to win the project against Rio. I hope GV come through with a bid. They may be able to profit if they can pick some CZR up and then force Rio to lift their bid and then cash in. For instance GV can start buying on market. You can’t purchase at under your bid price however because GV havn’t put a formal bid in I suspect they are still allowed. I hope Fex also push ahead. They could start by making their offer unconditional. Then they can potentially keep a chunk of the 12% offered to them and then again profit if they can push Rio up. As far as I can tell all of Fex’s other projects have a higher cost than Robe. They are planing 4 mil ton / annum but it’s all relatively high cost and marginal if Fe price goes lower. The Robe project seems more financially robust in case Fe drops further.

I think 92c is wishful thinking but I am hoping for a bit more than 31c. MC is also key. He holds about 60% of the project. Can he convince Rio that he’ll look elsewhere if Rio don’t increase their bid. By the sounds of it he’s not too happy with our director and probably doesn’t want him to control our money any more than I do - ie Rio’s bid. MC is about 80 I don’t think he can be bothered having his money controlled by CZR looking to build new projects. MC is worth about $1 billion btw guys but doesn’t seem to want to build a mine. I think he wants to cash his chips.

Gltahs