ozl strategy, page-22

HT,

You make good points about OZL being prudent to stay well cashed up, esp being a single mine, but cash is a poor investment.

I certainly don't want to see OZL spend $1200mm plus for the other 80% of SFR.

Perhaps we need to see the SFR investment more as a liquid alternative to a contingency cash holding. Use most of the cash and watch the SFR rise. To pay a 40% TO premium already implies you see the 20% worth $320mm (vs the market 230), so to really get material value out of a TO you probably needs to be expecting that 20% to be worth near $500mm in a couple of years, when selling it as a mature investment to part fund C would seem logical. Meanwhile it is a great (saleable) contingency fund a case of a serious PH mishap. If we want protection from copper dependency then hedging is the appropriate means, rather than cash hoards.

We've got free cash flow over $500mm pa atm, we simply don't need $700mm in the bank in addition to the sizable equity holding in SFR. Easy to argue that half the cash holding would be conservative.

EL