Ann: Debt Finance , page-8

All quotations below are from today's ASX release.

Debt finance of "$22M for project development" plus "Additional facilities for cost overrun, working capital and bonding/guarantee requirements" has resulted in CCU agreeing to "hedge a minimum of 30% of silver production over the period of the loan" - 3 years.

If CCU is now going ahead with fixed price hedging for 30% of its silver production over 3 years, then that is clearly the wrong way to go in my opinion in such a strong, generational silver bull market.

To raise such a token amount of capital CCU would have had no issues combining a share placement with an issue to shareholders and remaining unhedged.

Now let's see how costly this bank loan will become in real terms. It has the potential to have a real interest rate in the hundreds of per cent if CCU sells millions of ounces of silver many dollars below the spot price.

It will look very sick if silver goes to US$50, US$100 or higher.

I guess CCU still have a chance to hedge via purchasing puts - in theory protecting downside but leaving full exposure to price upside.

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"Terms have been agreed with Commonwealth Bank of Australia and WestLB AG Sydney Branch to provide a secured loan of $22M for project development.

Additional facilities for cost overrun, working capital and bonding/guarantee requirements have also been agreed. The funding package is subject to documentation being finalised and a number of conditions precedent.

The project loan has a term of 3 years and will require the Company to hedge a minimum of 30% of silver production over the period of the loan.

The Company will now move to complete documentation associated with the funding package."