Ann: MACMAHON AGREES TERMS FOR BATU HIJAU PHASE 8, page-3

AMNT clearly have strong bargaining power in this deal however the arrangement seems reasonable for MAH. It appears that there is now less project risk for MAH in that a set return on invested capital and equipment is received, 15%. This would reduce risks of project and cost overruns which is attractive especially in these times and inflationary environment. The risk is really whether the upside of US$10.2 p.a KPI fee revenue is made. This is a payment to MAH if they opeartionally achieve what they need to each year (and half year).

The share price has risen from 13 cents to 18.5 cents over the last two months which is a big move for MAH so I suspect that this has been in the wind for the last couple of months.

Overall, seems solid, though perhaps not the big contract upside hoped. It does undepin a steady future income.

It would be good if MAH could snare some projects outside Natu Hijau to diversify, expand reach and provide upside.