I am a bit surprised by the way the share price has fallen away...

I am a bit surprised by the way the share price has fallen away of late, despite what I regard as positive news regarding the hot commissioning of the KMP, the signing of the Joint Statement of Cooperation with the Korean Mine Rehabilitation and Resource Corporation (KOMIR) agreement, and what I regard as a positive outcome for the Dubbo Project Optimisation study.

If the share price continues to fall I will start to become a buyer again even though I do not like to average up, the potential of the company is too big an opportunity and it will retest the $14 and greater levels on any positive news regarding funding or offtakes.

With the current price of 9.50 a placement at this price with a opportunity for holders to buy more shares for say 30,000,000 shares would raise $285,000,000. This would only result in a 20% dilution at most for anyone who does not partake in the raising. I do not think that the company would raise at this level but would wait on further news from the 20% buy in at DP level and potential Export agency level involvement.

None the less the total cost for the DP is far from being an great obstacle, if the current indicated 20% buy in value , their 20% contribution to the Capex and the value of the Export Finance Australia is taken into account.

The company is currently in discussions with several South Korean companies " The Company also continued discussions with several South Korean companies regarding potential build, own, operate (BOO) opportunities for renewable power and a chlor-alkali plant to produce hydrochloric acid and caustic soda onsite."

The potential for additional funds from the South Korean export agencies should not be discounted, especially as ASM has indicated that it has "... progressed discussions with companies regarding engineering and equipment manufacture for the Dubbo Project. This included exploring opportunities to leverage the full breadth and depth of South Korean manufacturing capabilities.". This is usually a prerequisite for funding via Export agencies. In addition South Korean is obviously very keen to protect the sourcing of the raw materials essential to their high tech industries. I would suspect that AUD 200 million would be the bare minimum that could be raised via this channel.





I have not taken into account the fact that the KMP will become cash generating in the next year and if all goes well will provide a good cash flow to allow the expansion of the plant using funds from cashflow and the remainder of the capital raise last year. The next quarterly, due in the next few weeks will indicate how much of this raise is still available after the costs of moving the setting up the new Ochang location moving the pilot plant and expanding to the initial 5200tpa plant.