chinese takeover, page-53

I read the annual report again today. I am even more confident that this takeover will be going ahead.

The Directors have had ongoing vigorous conversations with Xingang since May. Xingang could have pulled out numerous times during the previous 4 months when market conditions were worse than they currently are now. In fact the correspondence received from Xingang dated 31st October was the day the iron ore price had dropped to $110 a tonne. Since then it has rebounded to the now $145 a tonne.

The Directors have also ceased all exploration expenditure since May while we wait for the t/o go ahead. Its been my experience that exploration would normally continue under these circumstances. The Directors would look very foolish if the t/o did not proceed and no progress had been made on any of our tenements in the meantime. It is a "friendly" takeover. It is also unusual for the acquirer not to have paid a non refundable fee for not going ahead and tying up ACS for 5 months. Again the word "friendly" comes to mind.

Xingang have full funding in place, FIRB approval and Chinese gov't approval. They have obviously worked hard over the previous 4 months to have everything fall into place so they can make a bid. In fact the bid is more certain now than it was first announced back on the 27th May when the sp first hit 38 cents. A lot of ground has been covered since.

Again I mention the Directors have stated they aim to have the takeover price at a level that is consistent with analyst valuations which are between 70 cents and $1.10.

Not long to wait now.