Ann: Comment on today's AFR Article , page-11

Hey Peter, need to clarify a few misconceptions here. I am not and have never been a shareholder of PEM. I am a shareholder of CBH, albeit a disappointed one. I am not promoting investment in or out of either stock. I was against our Board wasting our time, money and effort with the aborted bid for PEM, because on any analysis, the PEM shareholders would never accept (demonstrated by a reported 95% approval for their Chinese transaction over the CBH bid). Happy to call the placement a takeover but whatever you call it, it is a very good outcome for their shareholders. Wish we could be so lucky. Re: the rumours around interested Chinese parties, it is well known in the investment community that our Board has been actively seeking investment from China (and other overseas parties) since at least mid last year and have had no luck in 10 months. I contrast this with other Aussie resources companies who seem to be able to snap up Chinese investors with ease. I suspect the reason we can’t is that we are burdened by an enormous debt and out only operating asset is not considered as being of high value. Further, in my view, the reality around RASP is that it is simply not worth pursuing as a stand alone operation, it needs Perilya’s mill to proceed – otherwise we would have done so.

A recent market report on CBH said that in their view CBH was trading at over a 1,133% premium to its value and that was when we were sub $0.04. It valued the comapny at $0.00!!!!

All I am suggesting is that we do not get too excited over market speculation and that people apply some caution to investing. I do so particularly in light of what Stephen Denis said in an interview in the Cobar Age (full text of article below). If you read the article it does not sound like a Company on the brink of achieving something, rather it sounds like it is on the brink of falling over. Stephen says that they will have to close Endeavor in 2 months if the Govt does not release the $12 million environmental bond. It also sounds like they are struggling for cash given that they need the govt to release their bond simply to continue. I am actually surprised that the ASX or ASIC has not questioned them over this as there has been no formal announcement on our company’s plight in line with Stephen Denis’ statements to the Cobar Age.

Read for yourself and judge for yourself where we currently stand!!!

Cobar Age Article:

“Mine’s future in doubt
11/03/2009 1:52:00 PM
“If CBH can’t access its own funding and we can’t make other financial arrangements, then the Endeavor Mine will close in two months time.”
They are the chilling words of CBH Resources Limited managing director Stephen Dennis.
The cash-strapped zinc, lead and silver miner has launched a desperate bid to access preserved funding urgently required for continued operations at its Endeavor mine near Cobar.
Last year’s collapse in mineral prices impacted severely on the mid-tier miner, forcing the company to drastically downsize its Endeavor workforce from 600 to 120 and cut production by 50 per cent.
A $30.8 million loss was also recorded for the half year to December 31, together with an impairment write-down of $43 million. Faced with a below-cost return for its reduced zinc and lead output, CBH has now taken the unprecedented step of requesting State Government approval to access a mandatory $12 million mine site rehabilitation fund lodged with the National Australia Bank.
Mr Dennis said the company was not seeking a financial handout from the government but access to its own locked-up money.
“We are not looking for a financial handout in this difficult time - only for access to our own money locked up in the National Australia Bank,” Mr Dennis told the Cobar Age last Friday.
“We had to deposit $12 million in a bank, as a State Government requirement for rehabilitation, if the mine closes at some stage. We would like access to this fund - during this economic climate the banks have deserted businesses and are not lending. The NAB only has to send a letter to the government and our money would be available for use - but they won’t.”
Mr Dennis said to obtain the release of the preserved funding, CBH had offered to put up its Cobar properties worth $17 million as guarantee.
“We told the bank the company would put up all its 150 properties in Cobar, which would realise $17 million, as guarantee but they won’t accept the properties as security,” he said.
CBH’s former Broken Hill merger target Perilya has reported a cash balance of $19.1 million including a $10 million deposit from Chinese zinc producer Zhonjin Lingnan for the half year to December 31. Perilya’s cash position was further strengthened last month with receipt of the balance of Zhonjin Lingnan’s $35.5 million placement fund."