Ann: Kalkaroo Sale Process Update , page-2

Update on Kalkaroo Sale Process released by HAV this morning.

"Several non-binding indicative offers for Kalkaroo have been received from substantial mining groups that are at a level appreciably in excess of the current market capitalisation of Havilah".

Currently, the market capitalisation of HAV is A$61 million. Hopefully, appreciably in excess means greater than $200 million!!

"A short list of parties have now been invited to proceed with round two of the sale process. In order to provide all short listed parties with a fair opportunity for detailed evaluation of the Kalkaroo asset, final binding offers are not expected to be received before late July at the earliest."

So, this is a little quicker than I was expecting. But late July 2012 is the earliest shareholders will see anything. At least it gives HAV time to get all assay results in and presented to the short list of parties.

Still no details on who the parties are. Still expect OZL and MMG to be on the short list of parties. IMO, I doubt Glencore would have even been on the EOI distribution list given all the bad blood.

I would not expect to see an announcement of who is on the short list (but they may indicate the number of parties to create some bidding tension) due to confidentiality agreements put in place.

Remember, once they are finished in the data room, the parties will need to go back to their offices and work on NPV modelling etc, Credit Committee approval, Board approval, organising preliminary financing etc which all takes time.

Then another few weeks/a month for HAV and Standard Chartered to sort through the offers, accept one and put paperwork in place.

In addition, PIRSA and other government approvals (for Minmetals that would likely include FIRB) will be required.

Remember, as Kalkaroo is a material asset to HAV under the ASX Listing Rules, an EGM will be required for HAV shareholders to vote on its disposal.

IMHO, shareholders may not see any capital return/dividend until after the AGM (a capital return will need HAV shareholder approval).

Finally, as in any due diligence/data room, "Despite the above there is no certainty that a satisfactory binding offer will be received upon completion of the sale process."

Cheers