Ann: $58m Funding to Completion of Feasibility St, page-42

re: Ann: $58m Funding to Completion of Feasib... 1: Dilution

A necessary evil for all shareholders of any company without an income (or else nothing gets done). Normal retail holders obviously prefer a rights issue over a placement to specific sophisticated investors. But rights issues cost far more due to legality and prospectus issue.

But the end of the story is that the company needs funds for drilling, sample assays, metallurgical tests, geology etc etc. Most holders hate them but I don't as imo they are the best way of raising money without asset fire sale or Conglin give away deals.

No issue with Dilution as its at the current market sp or just off it.



2: Off Take

Conglin gets 16% and can take another 20%. So at worse case that leaves a max of up to 64% from Browns Range to the yet unnamed off-take partner. Although its non binding and we don't even have sketchy details on what that that deal entails? Nobody has any issue with the off-take because we know nothing about it except its non-binding.

Big issue here is that 16% is at company cost. Which regardless of the actual cost means that 16% of HREE at Browns Range is for "ZERO PROFIT". That effects all holders (except Conglin) and shareholders suffer zero profit for the whole life of Browns Range and for the GIFT of only $26m.

3: Payments

Conglin underwriting the rights issue has nothing to do with the gifting 16% of Browns Range for $26m. What you are overlooking is that lets say by the last payment in 2014 that we have doubled/tripled or better our reserve, and then lets say the grade also improves.

As the reserve increases that headlining valuation of $162m is worthless and out the window because the board donated 16% for just $26m. So why in the world are we rushing to sign the deal like its the last/only offer they will ever get.

That why this is a total sucker punch to all long term holders. IMO holders need to vote against this crazy premature rush to sign away a big slice of NTU's premier Browns Range project for this silly $26m. If this lunacy gets voted in NTU should at least insist that it be paid in full (this year). Even on the payment schedule, due to ongoing 2013/2014 drilling they should put in an increasing scale if reserve/grade gets to set amounts (i.e. doubles then say $45m total payable). Or something like that so holders are not watching the profits all go into Conglin's pockets.

The whole thing is crazy because we have just started and NTU would have been lucky to have done 18,000mtrs of drilling which is chicken scratches. Holders must remember the WET SEASON means your lucky to get drill rigs for 3mths of the year and environmental concerns means you can't move around exploration tenements without all sorts of red tape. (fine when its a full mining lease with roads) The only way you get around this is by having 6 rigs over the dry season drilling the hell out of things, but that brings in other issues inc staff and generating targets.

We are talking only about the problematic $26m the rest is capital raising (exc $2m gold rights) that doesn't involve giving the companies main asset away for sixpence.

Lets remember the Rights Issue brings in $26.5m straight away (no Conglin pay later) and then in two years another $19.9m in option conversion. So with the rights issue and capital raising we get instant payment and it's worth more in the companies bank account than we get for the 16% gift that we are giving Conglin. (not to forget we make "zero profit" on that 16%)

4: Upside Valuation

You don't need to be Conglin to know exactly where this is heading. If this 16% is passed it will only be a relatively short time until NTU becomes another ORM. Conglin is positioning himself to pick up NTU well below its assets.

I have my sentiment at buy, but my family and friends will be all out of NTU if they approve this 16% madness. We don't need to sign this deal as we are about to get an instant $30-$32m without it.

We can revisit it in 12mths, where we will get a far better deal than giving our HREE away for peanuts. I have been in NTU for 3 years and held great hope for its future, but this is so short sighted its a little unbelievable. It little more than desperate headline, but the biggest and best clue is how the market has reacted to this company changing announcement.

The market is clearly telling the board that any deal with Conglin offers absolutely no value for any buyer. Conglin will have won the jackpot if he gets this past retail shareholders. If Conglin wants the company that's fine but lets not give it to him for chump change.

HREE is a different ball game to LREE, but its all about the metallurgical and extraction cost and NTU has specific advantages to most HREE hopefuls. That is NTU's main attraction (for me).