re: crr, page-3

re: crr
Svengali,

No the fee was as I understood it a re-sign fee and so nothing to do with the proposed joint venture. It would have been held by Jervois separately.

I'm breaking no Board confidences here as Mr Zhao discussed his fustration with Double Link after the first meeting with Jervois. He was hopping mad partly because a committee in Beijing had said he was not to enter any more arrangements until the test work was completed on the ore.

This revealed that CRR wasn't really an autonmous company as its own PR had portrayed it but really just an arm of the government. I think this created some embarrassment for him, but he was equally annoyed that such an insignifcant little company with almost no financial resources was trying to extract extra cash out of him at that time in that way.

He said angrily over a meal one evening during that week that he felt deeply insulted as the Framework Agreement was essentially an agreement to work together for the long term and not simply a one-off deal.

This could have been in part simply a way of expressing his annoyance, but essentially the point for Jervois was that here was a powerful man in a very powerful company expressing a wish to be a long term associate. That to him was the basis of the Beijig agreement. Young was just the first step. Every other company was buying into Australia. It was time for CRR to do the same, but shrewdly in a low-key co-operative way.

That was not a bad card for Jervois to have and it seemed to me and others I consulted at the time that there was no gain in throwing that card or away.

Certainly Mr Pusell thought he was just making the most of an opportunity for the company, but in my view and the view of many others that was very short term approach and precisely the wrong way to deal with the situation.


As it turns out no other company appeared which has been eager to be a partner in Young as Mr Pursell claimed at the AGM so the attempt to extract a fee not only failed in itself it created bad blood and possibly cut off a range of options.

Precisely why Mr Pursell couldn't envisage Jervois as a company doing the scout work, preparation and licensing for a range of large mineral projects in addition to Young I have never been able to fathom.