ahhhh simrose, page-4

Grizz,

Please understand I am only theorising, I am not saying that I know any more than the next guy.

However, since we are theorising together, I think that there are two separate questions in this.

1) Can BHP make a successful attempt at RIO this time around.

I think they have to. I understand it was the EU who held them up last time but the RIO shareholders are coming out in greater numbers resisting the Chinalco deal.

When BHP made their last attempt the world was a different place and everyone (including RIO) were living high on the hopg. Major RIO shareholders in Europe (who would have political influence) could be viewing things differently this time.

It is all conjecture on my behalf and I hope I am not sounding cynical when I suggest that wealthy people would have political influence but my view of the world includes a peppering of cynicism.

2) Will BHP want to make an attempt given RIO's massive debt situation?

Well, apart from the fact that I think BHP must do this, I also think when they do the figures and calculate what a RIO/China alliance will cost BHP in the next 20-30 years, BHP will determine that the costs associated with buying out RIO and paying their debts are tiny compared with NOT doing it.

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The danger to us as EXT shareholders is if they do it too soon.

Can you imagine if RIO has done a scrip-only take over of EXT back when RIO was $120+ ??? We would have lost money, not made money.

For us to be big winners it is necessary that this happen in the sequence I have described otherwise I think we will need to insist on cash not shares.

Post Aug JORC for Zone 2, RIO makes an offer and when it is all done and dusted, BHP take RIO over.

Maybe you're right, probably won't happen as it would require the Chinalco deal to be held up until after RIO make a successful offer for EXT. RIO probably would not make and secure any deal with us until Aug/Sep. Can Chinalco be held up until that late in the year?

Suffice to say that if we are taken over by RIO won't it be wonderful to be absorbed into a company which is itself due for takeover?

Then again (and yes I am rambling a bit) what if Chinalco is scuttled? That means that those Chinese Govt coffers overflowing with cash will be looking for other long term assets to secure. Given how many N plants they are building over the next 30 years a resource like Rossing South must be sticking out like a dog's proverbials for them.