a question, page-2

Morley,

In regards to the performance plan, I believe your interpretation is correct. I think it is a reflection of the low price they have paid for acquisitinos. For example, paying 1.9x 2012 earnings for Allmine, the only reason that this would get through is that they have offered the management substantial rewards in the event they can achieve the forecast NPAT. I don't mind this strucutre, as it rewards for performance moreso than just a large upfront payment.

Regarding the accounting of this, I believe it is an issue of shares, and that it wouldn't be accounted for on the P&L. Cany anyone confirm this?

Regarding Scott Walkem's bonus, I completely agree with you. I would far prefer to see EPS targets, ROE targets, cash-flow targets. Market cap targets/profit targets, with no reference to the shares on issue could certainly encourage irresponsible acquisitions. However, what gives me some peace of mind is that Scott Walkem has demonstrated he has a fine eye for acquisitions at a very cheap price which is certainly to shareholders advantage.

Regarding funding for their current pipeline, agm presentation p.11 suggests they are undertaking group refinance to address the funding issues. Important to note that Allmine will not have to come up with bonding facilities for the NFC projects, only for their Arccon/MCC projects.

I'm sure that the issues you have raised are concerns for many investors, myself included. I believe the current share price more than compensates for these issues, but they are certainly valid concerns.