accounts out, page-19

Morning Perivale.

"About to unwind" is a general expression and of course does not specify a time period. It is a function of how fast GF reaches the point of realisation that what they have accessed through its JV agreement with CQT is in fact a resource of commercial significance to them. This will happen I suspect well before you or I know about it. This has corporate appeal. The management of CQT realise this. In many ways, insto involvement will assist them get the best price for the ground in the event that GF decides to take it all as previously discussed. For example, if instos decide on a position, they will do their own in house evaluations. Under confidentiality, they will access information and data not generally available to the market to assist then in this process. They would work out a conservative NPV which after applying discounts, would effectively become the buying cap for a position over and above any placement stock taken up. For argument sake, let us that they arrive at an NPV of $A500m...they would apply a discount of 30%.This would reduce the NPV to $A350m. With 240m shares on issue, this would imply a share price of $1.45 mcp. A further 20% discount would be applied to this figure resulting in a total discount of 50% for the NPV. This would equate to a final acquisition price cap of about $1.15. This means that this conservative price is what an insto would pay up to in order to secure its interest. The discount lines can vary depending on risk aversion strategies but are designed to move the acquisition price closer to the NTA of the target.

Hope this helps understand my idea of a corporate play.

ciao