agm, page-5

Kacy,

my gut feel is that RLL will demerge but on condition that there will be a capital raising after shares (in specie) are offered to current ADY shareholders.I cannot see RLL using the currect ADY shareprice as the basis for going to market. That is why I am suggesting 50c per new share.The high price will only be attractive to Institutions. Therefore my guess is that they will be offered the bulk of the issue.

I do not believe that the takeoff agreement will deliver sufficient ( $100m) and timely funds in this market.To date Phil has not been able to get the takeoff agreements executed.It will take him some time to renegotiate deals. He has lost too much time and needs to start again.

The capital raising will mean no debt for RLL.

The ADY iron ore operation will ramp up production above 1m tonnes pa only after loans via joint ventures which will be conditional on Santa Barbara being 100% controlled by ADY.

Look at the end of the day all of the above is my view of the world. Not suggesting that it will be fact.Only Phil knows what action is proposed IF ANY!