Ann: Pani Combination Completed - Merdeka Acquires Pani CoW, page-7

Hi Ryan. Thanks for your post. My valuation continues to treat the two deposits separately at this stage. I have looked at what Provident have paid to secure the 50.1% interest in J Resources project (by effectively acquiring 50.1% of Andalan which acquired 100% of the project from J Resources) and used this as a guide to what Lion's 33.3% interest in the pre-existing JV (with Provident) is worth (the Pani IUP only).

I think J Resource were originally considering selling their Pani deposit to a subsidiary of Provident but it looks like a whole new entity has been created (Andalan) of which Provident have acquired 50.1% for US$80.16m. I think Provident would have preferred to own the entire deposit but have had to settle for a controlling interest. They would have insisted on that controlling interest.

When J Resource owned the asset there was an attempt to combine the two deposits into a new JV which as you know fell through. My understanding is it probably won't be long before we see a similar consolidation of the two assets again. As I see it the link zone is actually part of the Pani IUP, so I would very much like to see this drilled up properly before any consolidation of the two deposits is made. This will ensure the ultimate consolidation accurately reflects the ounces residing in that Link Zone.

You are right in that these deals are very much open to interpretation and this is simply my understanding. As always I look forward to your response as it would be good to get our heads around this.