Ann: Notice of Meeting, Executive Incentive Plan and option issue, page-99

Thanks Fonty.

7. The Directors, acting rationally, would only convert where a. the share price is higher than the conversion price, b. that higher price is likely to be sustained, as the Director must hold not sell and c. at the latest possible time, as time is money.

Not sure if I read it like that. I thought once options were vested then Directors are free to convert and sell them, obviously
at any price they deem fit and at any time of their choosing. Directors are NOT in my understanding FORCED to hold. If
you are linking 7b above with the perceived intention of Directors to hold in order not suppress the SP then that would
of course be a rational expectation. A mute point really as "rational expectations" hold up very well in this case. The timing
of the issue and the conditions attached reinforce rational thinking in regards to exercising their options {bar a takeover}
close to expiry 2018.

The 2 rational catalysts to convert & sell are successful appraisal and commencement of production.Once again, excluding any T/O in the interim that would cause the SP to appreciate markedly.


Successful appraisal would in my view trigger the "each Option vests on the announcement to the effect of potential economic viability of a future development project" clause. If appraisals are successful then this would certainly
be potentially economically viable. Bit of doubt when I read it as they mention potentially viable and actual commerciality
in different sentences as regards the "trigger" to vest. Regardless, that doubt is now irrelevant, due to rational
expectations and the fact that "actual" commerciality can only truly be confirmed upon production numbers in the
end. And 2018 might be cutting it a bit fine in terms of confirming commerciality and the vesting of said options.

For argument's sake let's assume the appraisals & flow tests are very good for SNE and the POO is better with the
result that the SP goes to 30cps. A statement is released to the effect that the future development project of SNE
is potentially economically viable and the options are vested. If all those 62 million options were converted at
this time & sold it would certainly not be a good look, short term greed trumps patience with a perceived lack
of confidence in attaining production status and no vested interest in that successful milestone. Agreed, the
effect on the SP would not be pretty. Some of those 62 million options may be converted & sold at this juncture
by other staff, we as shareholders have no control over that, however the effect on the SP would be negligible
providing it's not the directors selling & in substantial amounts.

On rationality, IF the appraisals are very good for SNE then patience would dictate waiting a few more years
until production has commenced, whereby the SP could be in the multiples of the price received post appraisal,
if all the planets align. However, all are free to convert and sell once the options are vested. We trust that patience,
reputation and rationality prevail. I think that management are in for the long haul based on their stated ambition
to proceed to production and grow shareholder value.

The 2% dilutive effect of 62m options is negligible, less than 2% actually as anything converted puts $ in the coffers.
If the SP stood at 60cps sometime in the distant future then it would only equate to 61c in terms of equivalent MC
without the dilution.

The options package has in fact been structured very well at minimal dilution with the alignment of FAR management &
staff's interests with shareholders.

GLTAH