Ann: Business Update, page-61

Hi All
surprised with days action but then some don't know what they are looking at. people are wanting figures names on trails we aren't getting this yet but smart people will follow the production side at this stage

first some are mixing cash receipts and forecast, these are different things, the forecast is sales not receipts. the forecast has been reaffirmed the sale breakdown to me looks like 10m first half $4 - 5m last quarter and about $15m this quarter. at 4000 tons that is at less $12m plus we do have sales from the wetlands this quarter (not all phoslock) . the sales last quarter would suggest xingyun has been going at 1m per month still. this quarter i expect that to be higher than the $1m maybe increasing to $2m per month, the trails would be using less than xingyun in my view ie xingyun $6m wetlands $2m rest of would $1.5m , east lake $2m the two trails $4m

i expect us to be at the upper end or over forecast.

people have talked about margin at 50% for the quarter. the second quarter i had sales about $7m and 64% margin , last quarter the costs increased and sales down from the second quarter so this would be the reason for the margin drop in my mind. the current quarter we are looking at three times the sale, expect margins to rebound this current quarter.

on the pipeline china stands at $200m, the criteria if i read it right would that mean xingyun is not included ? technically i would think not, it is not waiting on approval or financing. if it is included then the 200m doesn't add up to me. Xingyun lake and catchment the comments around that suggest the lake would be $50m add $20m for catchment then that is only $130m left over from the 200m. east lake about the same size so say $50m that leaves the 2 trails as $80m and the comments on them was much bigger than xingyun . so xingyuan might not be in the $200m

on production sounds at this stage aiming for 30000 next year, if all sold would be $100m a tripling from this year.thats great and would mean newing figures are more that reasonable.

this is also a business update, this is not the quarterly. maybe more out in the next couple of weeks. if it was the quarterly it would be called the quarterly report and also have info on other areas ie brazil, europe

thanks
mickem