Ann: Beyondie DSO Hematite Update , page-6

If the ann. from the 28/10/09 is still most relevant:

"EMG will issue 8,553,971 shares at 45 cents per share and grant 4,276,986 options at 27 cents per option to CMIC. The options expire on 30 September 2010 and have an
exercise price of 20 cents."

Then the JV vehicle will be capitised with $100mil equity from CMIC and $100m debt by EMG (via a loan provided by CMIC at 3% above the bank rate). I believe that loan is on very favourable terms. AGL's recent $300m debt issue in the States was from memory issued at about 2.6% above bank bill rate.

Trying to value the JV is very difficult, but I've had a a quick stab in the dark below.

Market value of the deposit $140mil*
JV capital $200mil

So let's assume the JV has a valuation circa $340 m.

EMG share $170m (less $100m debt) = $70mil. Assuming roughly 90mil shares on issue fully diluted per share valuation of circa 78 cents.

*Used the recent AXO merger with AGO as a guide. AXO had a 500million ton indicated magnetite deposit, no DSO, although they did have port access. Arbitrarily I've assumed port access and DSO to be equal. That transaction valued AXO @ roughly $140m. If the DSO drill results for the JV come up trumps then there will be a significant re-rating of the SP IMO.

Also assuming the deal is still on the most recent share price is a 16% discount to the CMIC issue price. No value attributed to EMG's other base metals tenements.

Quarterly due today.

JT