Ann: New Exploration Tenement Granted , page-8

Hi Seaemay,

valid point about the need for the DFS to be positive in order for the Japanese company to invest. And also, for the Japanese banks to finance that involvement.

I am simply very confident that JOGMEC has sufficient expertise to assess, and re-asses the project, almost without the DFS.

They would have examined the Watershed project carefully before approaching VML, years back now. At that stage they would have been confident of its potential. The corporate expertise they have available to draw on is extensive. Also, they would have looked at other projects around the world before deciding to enter into discussions with VML. Its just the conservative way they go about their decision making. They will make a decision to walk away from a project, but they don't like doing it, so they scrutinise it carefully beforehand, before committing to it.

So, my conclusion is that they have a very good feel for what the DFS is going to produce. Their corporate ability to determine that is vastly superior to mine. If they were doubtful about the outcome of the DFS, they would simply not be bringing Japanese companies to the table now.

I agree, they will be sensitive to the future tungsten price and likely exchange rates. And, this will be over the long run because that is what is important to them. They will have projections of how that will impact on the project, and this will inform their decisions on the project.

JOGMEC has agreed that the product from Watershed is to be sold on the open market, or at least at current prices, as I understand what VML have said in the past. That indicates they are allowing for profit to flow.

They are still in there, and while they are, I am very relaxed about VML. It just might take some time, longer than I would like, and certainly, longer than I anticipated or hoped for when I bought in.