Ann: Proposed Divestment of Paulsens East Iron Ore Project., page-55

When Paulsen East was mothballed SRK "focused" on Port of Ashburton solution. in reality CZR spearheaded which SRK directors let play out collect fees and focus LEL. GII loan May already be in breach (min mined tonnage or expiry to mine covenant) yes they could sell LEL to payout GII but it's clear management believe in that project and don't want to jeopardise LEL SP. If SRK were to go down that route I just don't know how they fund PE work cap / port given Mcap $15m without significant dilution. one thing that is bugging me is purchase price is really 25.5m with $5m paid to Orion Equities to extinguish royalty. I know this entity owned PE tenement and sold to SRK in 2005 but that seems a hefty related party transaction no? in terms of Peru, without GII offtake rights and IO >$140USD they should be able to make that work at 66% fines albeit none of us have faith in mgmt. given they sold their primary asset I noticed in announcement they need to prove they continue as a IO producer otherwise could trigger delisting/wind up within 6 months. I intend to contact management later in Jan to understand Peru better and put across point to wind up vs burn more working cap on fees.