Ann: Capital Raising Presentation, page-33

Struggling to hold the placement levels means that the markets (you, me and all the other punters) are telling us Lachlan got a good deal for shareholders and didn't let the new money in too cheaply off market.

The $16m Liabilities were reduced by $2.2m when the Indonesia Assets were sold post yr. end. The lions share of the balance of those liabilities would be provisions for rehabilitation which it would seem will be years away, now the UG is as good as in the bag. In any event they are well and truly covered by the PHES scheme and the scrap value of the plant when mining ceases.

As for the up front capital cost associated with the UG proposal, its likely to be minimal, in comparison to other start ups.

We own the plant and have the funds to spend $2.7m in the year ahead to keep it in a ready to go state.

Whilst the resources are well below natural ground levels they are at the current finished levels of the bottom of the Nugent and Giant pits so no massive costs involved in tunnelling down to them.

With a bankable DFS, we should have no trouble getting take off agreements both for the copper and gold. Those agreements are traditionally sweetened by offers of finance. Given that the mine development period leading up to ore production is only 5 months and a keen mining contractor should be happy to offer 3 months terms any requirement for an equity injection should be minimal. I optimistically think that if Lachlan has to look to issuing shares it might well be at a much higher price than 3.1 cents given that the closer we get to production the more valuable HGO should become.

There are a lot of positives to outweigh the negatives that are inevitably there.