Ann: Decision not to Proceed with Planned Demerger, page-4

Hi Tapdancer,

Yes, it would have been good if ATR disclosed some details on the interim injunction when it was granted, though given the fact that they haven't even noted that the plaintiff was a former director of ATR they would be unlikely to reveal to shareholders any published reasoning from the HKHC if it wasn't deemed to be supportive of their position.

I don't quite understand your contention that it would be sub optimal to raise funds when the upstream operations are not separated from the downstream ones. I've never come across a lender that would prefer less security for a loan, particularly when the tangible assets that provide the security are also producing positive cash flows for the borrower that could be used to service the loan.

Any potential partners wishing to farm in or purchase equity directly in the DMS project could simply invest into Donald Mineral Sands P/L or Zirtanium P/L, both of which sit under Astron P/L Australia, which is in turn controlled by Astron Corporation Limited (Hong Kong) - ATR.

I also cannot follow the logic as to why it would be operationally desirable to separate the upstream mining ops from the downstream refining ops, as a vertically integrated producer, refiner and marketer of mineral sands products can provide knowledge and support over all elements of the business, such as the R&D Astron Titanium (Yingkou) Co Ltd (PRC) provided for DMS the in the extraction and refining of the fine WIM ores, which under the demerger proposal would have had to be licenced back to DMS!

There may well be good but unstated reasons for the demerger, such as PRC or Aust. government concerns over their national interests in the deal, possibly perceived conflict of interest between ATY and their current raw material suppliers or end users, who knows? Either would make more sense to me than easier access to finance for DMS...

If there is indeed a compelling reason for the demerger then I believe ATR would stand a better chance of getting it done if they do the following;

• Provide shareholders with an independent expert valuation of the Astron Titanium (Yingkou) processing and marketing operations and provide share sale facility for shareholders to receive payment if they do not wish to hold shares in a separate OS entity.
• Provide shareholders with proforma financials based on full year audited accounts.
• Get the demerger relief ruling from the ATO & HK tax authorities before proposing the demerger.
• Give shareholders time sufficient to review and get advice if needed on the demerger proposal.

No need to rush, why not wait for the DFS to be completed first so we have a better view of it's potential, DMS is not going anywhere!