Ann: Presentation - Africa Down Under Conference , page-9

re: Ann: Presentation - Africa Down Under Con... ....and speaking of recycled presentation slides here is one we have seen before but I believe deserves a few moments of thoughtful reflection. One of the criticisms I have read from the SDL "against" team is that if SDL really did have a fair dinkum interested party then they would not be sending out documents for project equity but rather they would be behind closed doors right now putting ink to paper. I suppose on the surface that argument sounds fair enough but consider the diagram below taken from their recent presentation(s). They are not talking about a Hanlong style total takeover. Such a takeover is cut and dried and it would be a straight forward process of SDL handing over the keys to the front door in exchange for x number of cents per share......

....But it would seem that there are many possible combinations and permutations of what a JV might look like. A proposed partner may say "we don't care about your mine but we will build a rail and a port and you can take or pay us x dollars per tonne to ship your product" this would result in a much lower capex but a higher opex. Another partner might say. Give us half the mine and we will give you half of what Hanlong was going to pay and we will pay for half the infrastructure. Such a partner may have banking ties and could arrange finance to assist SDL with capex costs to minimize further dilution. Another partner may say we will pay for everything and we want 75% of the project. If SDL was debt free and never had to issue another share then in 4 years time, even if profit was only $10 a tonne 35/4 x 10 = 87.5 mill PA profit. Given a PE of 10 that means a market cap of 875 mill and more, maybe much more, if profit exceeds $10 tonne.

I am, not for one minute, suggesting that any of these scenarios are on the table but the point I am trying to make is that the board may not be trying to compare apples with apples but rather they may be faced with a whole fruit and veggie shop to get their heads around. This would not be a simple matter of picking a partner and putting ink to paper behind closed doors but rather a complicated due process may need to be followed to work out exactly what will offer the ultimate best outcome for shareholders. This process would certainly involve a formal offer being made by each potential partner as per the recently sent out forms.