announcement, page-26

Hey turk - hard to say cause I haven't had time to watch carefully. It's an option on something big or it going to go bankrupt. Funding the key in the short term and nothing else matters. I suspect the Chinese connection is far more important in the long term than we have given credit for as the Chinese are very strategic with their resource investment but ESI is completely vulnerable with a wide open register and very little cash - if the tech really is that good then it will probably just be a case of what is cheaper - let it die and buy the shell of technology or make a bid (you probably get the whole company for 3 or 4c at the moment) or take a majority stake in a placement to see it through for another year.

If they had $2-$5m in the bank people would be talking so positively about this company and how they dumped the Vietnamese for the big ticket of China and are securing their IP in the USA etc etc

It's all about the funding and the directors have to sign off going concern accounts so they want to be sure about what they are doing or they get a law suit.

Trading wise it looks like some people finally gave up on it - seems the Tincom thing was the last straw - I know it was enough for me to take a few little tax losses - I am not directing this at anyone in particular but I do question the management nous when you make 'final arrangement' style announcements about going ahead with Tincom and then pull the pin a month or 2 later. They have had plenty of time to make character judgements and do research on whether Tincom were capable of going forward and if the play was a final warning to Tincom to get the $$ flowing or we are pulling out then I suggest the ASX announcements were possibly misleading to shareholders.

I knew the management and history of managing this company had plenty of question marks and debate so I knew what I signed up for. The next few months will tell us what was at play - the best outcome would be a significant stake from the Chinese players with fresh equity funding (the dilution would be irrelevant given the nature of the investor) as this would have the SP at 3-10c in no time with all the china followers jumping on board. The worst outcome is that ESI is about to go bankrupt - both probably only have a 5% probability and a dilutionary muddle through is the most likely with a 10 or 20 for 1 consolidation and life support funding till the Datang burn - if you thought the La Jolla deal was bad I fail to see how any funding from here is going to be a good deal unless it is strategic and Chinese.

I know someone at ARUP but I refuse to call them now as I could end up with inside info and I don't work that way. They confirmed earlier that the technology works but I would never drag them into the idea of whether it is a good investment or not - that is for us to judge and now the situation is too sensitive to discuss IMO.

Good luck all - you don't play in companies like this with money you can't afford to lose IMHO - you hope you jag an entry just after the last dilution and just before the big run but some just fail. RRS @ 2 or 3 cents, ADO at 1c, PRR @ 0.5c are all examples of heavily diluted stocks that came through in the end but the list is longer of the failures I am sure. Either way ESI will join one of the lists over the next 6 to 12 months and we make some cash or write it off and move on.