history never repeats:or does it, page-10

re: terrl leo terry leo terry leo To really p!s you off Glen i also got the feeling with the activity down there that the further drilling obligation might carry on as announced in the same notice to the Hong Kong stock exchange.


Further drilling obligation
Pursuant to the China Project Option Agreement, the Company will carry out a further drilling obligation to
drill at least 300 holes for up to five years from the date of the Sino-Iron Acquisition Agreement in the Mining
Area to endeavour to locate up to additional 4 billion tonnes of magnetite ore (on top of the 1 billion tonnes of
magnetite ore to be made available to Sino Iron and the 1 billion tonnes of magnetite ore to be made available
to Balmoral, aggregating a total of 6 billion tonnes of magnetite ore) and will notify the Seller of at least (on
top of the 2 billion tonnes to be available to Sino-Iron and Balmoral) 4 billion tonnes of magnetite ore (or such
lesser amount as was located under the further drilling obligation).
The estimated cost for the drilling program under the further drilling obligation is approximately A$15 million
(approximately HK$84 million) and will be deducted from the consideration to be paid by the Company in the
exercise of any of the Options. OPTIONS
Upon completion of the Balmoral Acquisition, the Company will enter into the China Project Option Agreement,
pursuant to which, in consideration of US$100 (approximately HK$780) to be paid to Mineralogy, the Company
will be granted the Options to acquire up to an additional 4 billion tonnes of magnetite ore to be exercised
within the following period:–
• in the case of the first option, within four years from the completion of the Sino-Iron Acquisition and the
Balmoral Acquisition; and
• in the case of further options, during the period commencing on the completion of the Balmoral Acquisition
and concluding on the date which is 120 months from the date of the completion of the Sino-Iron
Acquisition.
Each of the options will be exercised in the form of acquisition from Mineralogy or Mr. Clive Frederick Palmer
of a company which shall have been granted the sub-lease from Mineralogy having the same rights as Sino Iron
and Balmoral (i.e. having the right to extract 1 billion tonnes of magnetite ore in the Mining Area) for a
consideration of US$200 million, adjusted for Inflation between 1 March 2006 and the date of completion of
each acquisition.