gm resolutions, page-11

snoball,

i've got a few reservations about floating the non coal assets.

i hope the following makes sense....ya may need to use some interpretation skills.

1/ bwn haven't yet proved that they have a coal resource....they have only just recently sunk their first holes.

2/ if the coal tenements are a flop, shareholders are left with squat.

3/ bwn plan to hold a % (significant?) of capricorn....in order for bwn and its shareholders to retain their % without being diluted they will need to participate in future cap raisings....this requires funds that bwn will have to fork out.

4/ their is an expense involved in floating a company.

5/ their is an expense involved in order to run capricorn....it is cheaper for shareholders to have their assets run from one office.

6/ if bwn get taken over before capricorn can add value then bwn shareholders won't get any consideration for bwn's shareholding in capricorn in the takeover offer.....so now we are in a situation where we have coughed up our non coal assets for $0 and we never end up realising any value that is unlocked and the suitor gets that upside for free......shareholders lose.

7/ current bwn directors will form the majority of the board of capricorn.

basically, the cost to bwn for floating the non coal tenements, managing those tenements and contributing to any future funding requirements is more expensive for bwn shareholders than it is to run them from the one office and drill a few holes.

if it needs to be done, do it when we know that the coal tenements have proved to be an asset.....at least a JORC????

for now, it looks like its an exercise in making broking mates a few $ and giving bwn directors a double income.

and for all this....shareholders have to buy capricorn shares in the float.

cheers