review of 4d and half year accounts, page-4

Phantom,

1. Who cares that WEG/Rizhao are related. Ones a equity holder the other a creditor. By the way Rizhao deferred its pre-sales shipping and reset it at market rates allowing PLV an extra few months to send shipments elsewhere. According to your theory it's to help out the related equity holder. Two ways of looking at it.

2. When the project was acquired it was not worth nil. Read the accounts and don’t make stuff up. Cash flows are currently NPV zero because stage 4 has to pay for one off costs such as the acquisition cost, stamp duty, legal fees, mobilisation, and equipment. Subsequent stages will not have to carry these costs and will be NPV positive, will have positive cash flows and will lead to a reversal of the impairment. The accounts have been formed on the assumption that the JV does not exist (PLV carries all the impairment) and that after stage 4 operations will cease. Neither are correct. Any decent analyst would focus on the cash. Impairment is a non cash item arising out of operational timing.

3. Not a big picture issue. Focus on small stuff if you wish.

4. When would you suggest the JV be backdated? Rubbish issue imo. We do not owe WEG $6m. We owe the JV $12m of which we are a 50% holder. It will be JV funds to provide forward funding. Its owed 1 day before 2014. At 3 ships pere month, we have a few ships going out before then.

7. ICA were instrumental in setting up the initial offtake and had fees. Those fees were paid when the initial offtake was re-negotiated. Standard don’t you think?

8. GNR have every interest in getting PLV to deliver the ore. They want the ore as they are commodity traders. They don’t want the headache of operating a mine. They have provided PLV with standard project finance. With any project finance you must repay it. We do so by delivering the ore. What would you like GNR to do? Here take $24m and don’t bother about repaying it?

9. It didn’t take months to get GNR this far. It took months to get 5 different parties to reach agreement. Two of those parties have been settled with as a result of GNR funding and will drop out of all future negotiations. The negotiation pathway will be a lot easier now.

Funding required is not $20m. PLV requires $10m which can be raised via any mixture of pre-sales/equity.

Cheers
Bleasby