Ann: Power Supply Contract with Newmont Mining Services Pty Ltd, page-8

Well, I don't know what all the fuss is about. Stockdoctor had stated that Newmont went to tender earlier but they still held the buy recommendation. They indicated that is what they thought was part of the cause for the recent SP weakness and that the African venture taking so long to get off the ground was an added comment. Then yesterday when the inevitable arrived - I don't think you put it out to tender unless you have a 50/50 chance of changing - then Stockdoctor changed to exit the holding... So previously impressed with management they are saying that they want out. Well, I did the numbers a few times. 300MW - Newmont 15% = 30MW. The recent announcement was for 13MW new business so net loss was around 17MW that's around 6%. Yet the share has dropped from 70c to 53c so 24% down and even Stockdoctor has a new exit valuation of 72c down from 80c. - 10% down.

I don't get it - The diesel generator would have had to be replaced as Newmont wanted dual fuel technology. So really the plant would have had to go elsewhere anyway. The plant can be redeployed and that probably a good deal for someone else - probably depreciated.

As regards Africa I am extremely glad they are taking it slow - you can get stung badly there. In fact, the whole plant can go missing if you are not careful - ask the local power generator.

So I see we now know that they will buy at 50c. Still, almost 10 million to be bought at that level.

I don't see the panic - My numbers suggest that with excess plant and maybe a 10% decrease in profits they can still sustain the dividends easily and that's a 6.7% yield including franking... As usual, yesterday's price factored in the uncertainty and the reaction, in my opinion, was as usual overreaction. I would buy more but have enough.