Ann: Papyrus Newsletter September 2010 , page-3

I am profoundly sorry to say I have sold out of PPY today. I don't know whether to laugh or cry at the last Newsletter.

It trumpets some sales of veneer. - a grand total of 965 square metres, and 'stock on hand' of 120 square metres finished product and 500 square metres of veneer ready for grading and trimming. Oh dear.

The entire 620 sq m stock on hand has the surface area of just 20 reams of A4 office paper- total value $120! I suppose the veneer is worth a lot more than the 19c per sq m of office paper- but it needs to be!!!!

The original experimental machine in the prospectus was claimed to produce veneer at 0.8 m/s (and needed to be tripled in speed!). At that rate the 120 sq m would take 100 seconds to produce (assuming 1.5 meter trunk length)!!!!! Yes, that's not a mistake- it's 1.67 minutes of production. The entire August sales and stock would take just 21 minutes to produce.

Of course its not that simple as presumably the veneer is inner trunk material only, so the outer material has to go to the chipper, doubling the time, and much of the material will be defective and discarded, perhaps doubling the time again.

Alternatively as a more generous-to-PPY check- if we take their claimed (back in the Q1 report) production speed of 197 billets per hour (which needed to be ramped up to 300 billets to match the drying speed) and assume that each trunk produces JUST 5 sq m of inner trunk material (and the rest is chucked in the bin- hugely conservative) - that's 985 sq m per hour so the 120 sq m stock on hand would take 7.3 minutes, and the total sales plus stock would be 1.6 hours.

For PPY to include these figures with a straight face is ludicrous. So much for continuous production! There should be huge piles of veneer laying around after 6 months of trials. Sorry but I've lost faith that this endeavour has any chance of turning a buck.

It's a shame. Good luck holders I hope I am wrong.....