jv with qrl, page-19

I have to admit I'm a bit down on the whole QRL thing and have already said so. I agree the corporate communications aspect of the whole thing is appalling. Even if there wasn't a (personal) relationship between the two companies, we would have all gone "huh? why not mention at the agm?"

However, let's play devil's advocate...

In some ways it's a really good idea.

Between the two companies there's a lot of exploration potential across a very big island.

OK you could argue it shouldn't be two separate companies in the first place but whatever..

It averages out the risk a bit... this way if either company gets a big hit then both benefit.

The usual risks apply, in particular there seems to be a lousy strike rate going from aerial surveys to hits in the ground. And it's not clear how well they're going to manage the size of the tenements.

So to put bluntly, I'm more worried about the competence of the various parties rather than the appropriateness of their arrangements.

However it's clear that FNT have become a "bottom drawer" share and maybe should be treated as such. If they really can go along for, say, another 2 years without needing extra money (ie the company keeps on being cash positive) then you're paying for the chance of that really big hit.

So I'm going to be contrarian on this one.

But they'll want to be very careful with their accounting.