Ann: Presentation - Creating a leading Australian gold house, page-71

Yesterday's DCN announcement included a "highlight" that:

· Exploration continued for additional water sources to supplement water supply to the Mt Morgans mill which will be required for ongoing operations

I might have missed where shareholders in DCN, GMD, or SBM had been told the mill did not have enough water in earlier announcements. Couldn't find them though.

How serious is the problem? Apparently:

· Exploration continues for water sources to supplement water supply to the mill, the requirement for which has been heightened by ongoing lower than average rainfall.

· In the event … timely access to supplementary water sources is not secured, it may become necessary to place the mill on temporary care and maintenance.

So serious enough to close the mill then. I am not sure how, if it is uncertain that additional water will be found, , shutting the mill will not be permanent, or chronic.

Given the prominence of the DCN assets, particularly the mill, in the Hoover House plan, it seems extraordinary that this problem was not mentioned.

My opinion: Some might suspect that the "water problem", which would prevent DCN making money by processing outside ore, and would therefore help weaken DCN for a second TO offer in the new year, given the current one has failed, will magically disappear if a second TO succeeds. I have no reason to think the water problem has been conjured up to defraud remaining DCN holders. I assume it is just bad timing. But not telling those deciding whether to support the Hoover House merger that " by the way the Mt Morgan's mill doesn't have enough water and we don't know if we can locate more" seems quite an oversight.