iron ore resource strategy, page-7

Hi Caldazar,

It's not their style and wouldn't be in their long term interests but "just for the giggle" I did what you suggested and came up with a spike of between $1 and $2 with the price settling to around 80c. I even did a set of ramped up numbers but I won't post them. Instead I've done an annotated set of what I consider possible numbers for the upcoming JORC statement.

The more important question is why wouldn't they do it? And the one word answer is credibility. galileo's post says it all.

The real news we want is the JORC resource for the No 2 Zone. I want to put out a number of figures for consideration. These figures are the total tonnes of resource that could reasonably be mined from the No 2 Zone. I expect this resource to average 25% magnetite and 0.1% tin.

10Mt is the lowest figure consistent with the 200Mt conceptual target.

15Mt is a good sized resource for this first zone.

27Mt is the size I first calculated with my model of the mineralisation.

40Mt is the maximum size I can get from my model.

50Mt is the maximum size I can envisage.

I'm hoping this first JORC resource will be released mid June. I expect the company will release two and possibly three sets of numbers, an inferred resource for the mineralisation they reasonably expect to be there, an indicated resource for the mineralisation they confidently expect to be there and possibly a measured resource for what they are certain of. Normally I wouldn't expect a first JORC to include any measured resource but if some of the drilling is very closely spaced and the mineralisation is consistent, then there may be some measured resource.