Ann: Quarterly Activities/Appendix 4C Cash Flow Report, page-11

I agree the last shortfall was a concern and does clearly place some question mark over the success of any upcoming CR.

The question is will they find a "collaborative partner" to come in with equity - they are clearly talking to people including LGE based on the update.

At the risk of being labelled delusional here is a scenario - what if LGE decided to stump up say $15/$20 m which would give them a fairly solid equity position, AUZ would have an undoubted core investor and funds to fast track development and exploration. You would expect the market to react favourably and LGE would end up with a capital gain and an investment where they would clearly be the controlling shareholder in a resource they need. You would expect Government would be very supportive with LGE very clearly committed to the project.

By no means am I saying this suggestion is any more than a "what if scenario" - there is however a possibility why?:

* LGE are in the picture still, they did extend the offtake and AUZ have now disclosed they are in discussion with LGE re possible equity or changes to the offtake to suit potential funders.

* LGE require Nickel and they could take an equity position in a project in a safe jurisdiction which would very likely get government support given LGEs involvement for a minor outlay with a significant input to the development of Sconi given the equity position they would hold. Their cash and involvement would likely fast track the project.

* LGE have equity in a refinery in close proximity to Sconi.

At the very least Holmes has shown by this announcement that he has taken control and AUZ now have a clear strategic direction.

The next stage of sourcing operating funds is critical - I don't believe this latest announcement is going to encourage retail investors to support a CR of the size the company needs - bring in a core shareholder as clearly they are trying and as a shareholder I will rest a lot easier.