Ann: Caldeira's Scoping Study Confirms Exceptional Financials, page-21

Hello. Lets accept the US$21/kg spot basket price in the study (even though it appears to currently be $17.80 excluding VAT) and deduct the 70% payability. The spot price comes to US$14.70/kg. Deduct $9.00/kg in total costs and the gross margin is US$5.70/kg. Multiply by 9,100,000 kg per annum and the EBITDA is US$52m pa, the NPAT is AUD$39M or annual cash flow of AUD$57M.

Say MEI can borrow US$250M and need to raise US$150M in equity. The US$250M at 6.0% interest rate will add US$15M to costs. The NPAT falls to AUS$24M pa and the annual cash flow to AUS$42M pa.

Say MEI must raise US$150M in equity at 20 cents per share. At 67 exchange rate, this adds 1.1 billion shares to the register, giving a total of 3.2 billion shares. At AUS$24M NPAT pa this comes to $0.0075 EPS. The investors won't make a profit at 20 cents.

At US$400M pre-production cost, at AUD$42M pa cash flow, the payback is 14 years. It looks uncommercial to me at current spot prices.