where is the bottom, page-24

Royboy,

I thought it best to get the reply to your questions from the MD himself, so here is his reply to your questions:

Thank you for bringing this to my attention as I certainly appreciate the opportunity to clarify the matter. I would be very disappointed if we have succeeded in baffling our shareholders when we have in fact been trying to keep them fully informed. Anyway; the facts:

There are 6 key deposits which comprise the Cloncurry Copper Project (E1 North, South & East; Monakoff & Monakoff East and Great Australia); currently some are on granted Mining Leases, some are not;
E1 North is on a granted Mining Lease and I remember this well as it was the first release that we made (on 12 May 2006) after I joined the Company. E1 South and East are not yet on ML's.
Monakoff is also on a granted ML, but the new Monakoff East is not.
Great Australia is also on a granted Mining Lease.

The primary motivation for our current EIS is to bring all 6 deposits under the umbrella of a single project approval, including the granting of the outstanding MLs.

Exco does have an existing Environmental Authoirity from a few years ago when we were last contemplating development (circa 2004). The resource base has however grown significantly since that time and the EA does not now provide sufficient flexibility for the size of project that we are now looking at (i.e., ~2.5 Mtpa). Essentially a full blown Environmental Impact Study (EIS) is required if you intend mining >2Mtpa. You can choose to go through an up-front assessment process, however in the interests of expediency we volunteered to conduct an EIS and commenced the work in the second half of 2007. The EIS requirements are many and varied including dry and wet season baseline studies and definitive details on the intended operations (size/scale, location, infrastructure requirements etc). This means that we need to complete our Definitive Feasibility Studies (DFS) before we can submit the EIS to the relevant bodies for their review and approval. As I have indicated in a number of recent releases we are on track to complete the DFS and submit the EIS early in 2009.

In our view, having successfully completed the PFS recently, and with the DFS and EIS well underway, this is a very realistic target.

Thereafter the approvals process is expected to take at least 6-9 months and we certainly intend doing all that we can to expedite this process through consultation with all the relevant stakeholders. Admittedly it is difficult to predict what issues, if any, may arise. To date however, our consultants have not identified any fatal flaws and we are encouraged by the precedents sitting as we do next door to Ernest Henry. Whilst this approvals process will remain on the critical path, we are very focused on our target of commencing construction before the end of 2009 with mining to follow in time to feed the mill ahead of first production in late 2010. At present we are confident that we can achieve this indicative timeline. If and when anything changes we will of course be required to inform the market.

I hope that helps to clarify the Exco situation. If not then please forward any additional queries.

Not my place to comment on Cudeco's situation but we are in fact using the same environmental consultants (AARC). To the best of my knowledge we are at a similar stage in the EIS process.

Kind regards

Michael Anderson