another potential sbm in the making

I think this confims the substantially widened creditor base and diminishes the likelihood of a float. For a float to go ahead creditors would (a) have to agree and (b) expect an entitlement by way of shares in the new entity. There would be a multitude of agendas in this group and I cannot see an agreement in detail being reached in any reasonable time frame. The administrators are not cheap and are eroding value as the adminstration drags on. Besides they are neither miners nor experts in the lithium and tantalum businesses.

So it appears to me that the cleanest solution would be a trade sale. It would be faster, and less costly. Although it may not maximise gross value (but may maximise net value - who knows), it would provide a certainty of outcome which creditors can use to close their books, and move on.

At least one ex MBL banker (John Caldon) with his 19.5% stake in HDN may think so?

I hold HDN, hoping for a repeat of history (a la SBM, lol).



IMF (AUSTRALIA) LTD

ABN 45 067 298 088

Level 5, 32 Martin Place, Sydney

New South Wales 2000

Phone: (02) 8223 3567 Fax: (02) 8223 3555

RELEASE TO AUSTRALIAN STOCK EXCHANGE (“ASX”)

MONDAY, 27 FEBRUARY 2006

SONS OF GWALIA FULL COURT DECISION

1. IMF is pleased to announce that the Full Court of the Federal Court today unanimously dismissed the Administrators’ appeal from Emmett J’s decision.

2. The Court confirmed:

(a) shareholders who buy on the market are entitled to prove as creditors in an insolvent administration where the company breached continuous disclosure obligations or misled them in representations made to the market about the company’s financial circumstances; and

(b) the shareholders’ claims rank equally with non-shareholder creditors.

3. Unless the Administrators are granted special leave to appeal to the High Court from this judgment of the Full Federal Court then the matter will proceed through the Administrators’ proof process.

John Walker

Managing Director