Ann: Notice of Extraordinary General Meeting/Proxy Form, page-59

Hi Wolf,

I think there is a long list of business risk issues here that go well beyond the 6% commission / cashflow offset that is being held out as ‘a benefit’ to SH.

Setting aside those wider risks, I can concentrate on the 6% commission because that is a fair point that you raise.

On face it does seem reasonable, however I have begun to see it as superficial … simply offered as a bait to entice SH.

Bear with me and I’ll use an analogy to explain how I’m seeing this.

1. If you’ve sold a house using an agent, the agent must work in your best interests.
2. Creating a market and securing the highest value for you is their legal duty.

Suddenly the property market booms. The agent knows plenty of keen buyers willing to pay a premium for your house.

In a booming market the % commission for the agent will rise significantly and they will earn much more than initially thought. Congrats to them.

3. Instead, the agent asks you to amend their contract and grant them ‘rights’ to buy your house from you. The agent offers to pay you a small amount of cash on the spot and the rest ‘later’.

4. The new contract now enables the agent to re-sell the house (was your house - now it’s their house) later to another buyer that they already know is will pay a 10% premium. The agent keeps all the additional gains for themself.

The alternative is to calmly (but firmly) ask the agent to focus on doing their job (in a booming market) and secure the highest and best value for you (the owner) and not try and cut you out of the deal.

If you re-read the above and replace ‘house’ with ‘coal’ and ‘agent’ with ‘ICT’ = Ahanna, and then consider the sales volumes for BBM, then I think it is a useful comparison to put what is being proposed into perspective.

The long term CKA shareholders have owned ‘the house’ during bleak times and are now being asked to give away their ownership ‘rights’ during a boom time that they have been waiting for.

Each needs to decide if they are comfortable to transfer wealth to someone else, without that somebody else earning any right to receive all the windfall gain.

It’s not a perfect analogy so I hope it doesn’t derail the conversation. Hopefully it helps unpack the terms and conditions so we may each make an informed decision.

AM74