Year closes at 50c exactly, page-48

In respect of Resolution 3, I would recommend that anyone who is concerned that the approval of Resolution 3 will result in an uncontrolled mass dilution of the company, undertakes some independent research after they have carefully read Schedule 2 of the Explanatory Notes.

As I have previously indicated, this resolution is to provide the company with the flexibility to issue performance rights OR options. Approval of the resolution in the first instance is not approval for the issue of performance rights or options. It is simply a resolution that allows the company to move towards what is considered by the management to be an appropriate response to updating the Employee Award Plan.

ASIC Class Order 14/1000, which is easily found through a Google search, restricts the award of performance rights and options to 5 % of the issued underlying product (shares or options). Basically, this restricts the issue of shares or options to 5% of the issued capital in the company in the specific class on issue.

The 5% limit takes into account underlying eligible products issued or that may be issued as a result of offers made at any time during the previous 3 year period under an employee incentive scheme covered by this instrument.

This means that any performance shares or options that are to be issued under the proposed Employee Award Plan cannot exceed 5% of the issued capital in the company, and this includes ANY shares or options already issued, or that may be made, to employees under an employee incentive scheme or an ASIC exempt arrangement of a similar kind to an employee incentive scheme. Therefore any options, or options that may be issued, issued from 25 January 2014 will fall under the limit and will greatly reduce the amount that could be offered to employees, whilst remaining within the 5% limit. I have used the 25 January 2014 date as this is the period 3 years preceding the proposed meeting and is used as an example only.

IMO this includes the options offered to, and taken up, by employees and the Board in the preceding 3 years. This significantly reduces the dilution that may occur. Furthermore, performance shares have KPIs attached and the shares or options will only issue upon achievement of the KPIs.

Yes, the mining industry is in a depressed state at this point in time and there are a significant number f 'good' people who are seeking employment as a result. Whilst I have no doubt about the competence of these individuals, it is often the case that the best available for a particular role are in employment elsewhere and are headhunted to a position with attractive incentives to leave. A good example of this is the latest appointment who has been head hunted from Greenbushes. This person will be one of possibly two or three people in the world with expertise in flotation processes for lithium, and given the narrow field of research required for the award of a PhD, it is more than likely that he is the only person in the world with the level of expertise that the company was looking for going forward. There is often more involved in attracting this type of expertise to a company than the intrinsic rewards alone and a well structured performance plan can actually meet the extrinsic rewards that that an individual is seeking to leave a position.

All IMO.