Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-23

The borrowed money from the DFC has to be paid back with interest . If the P1 plant is not financed but the mine is financed by DFC, the we would have to sell concentrate to China, since they have the capacity to convert lepidolite to hydroxide and or carbonate. This would give us income while we wait for finance for the P1 plant, however this would be the only way then to start to repay the loan, LPD would be well and truly held over a barrel on price and binding supply contracts by Chinese manufacturers. This scenario is not what we want, we would just end up a small concentrate producer held to ransom by refineries, until debt overwhelmed us or the mine played out. The DFC are smart enough to see this situation possibly occurring and have said when you get finance for the plant then we can proceed wit finance for the mine. The potential lenders for the mine want an update from the independent engineer on all project work done last year , the good news is they have the draft from the IE and LPD will finalise it for lenders to complete due diligence, I would hope they are putting top priority on this. I read it as another step forward, these are the restrictions placed on the company as time goes by to secure finance from potential lenders. If we want to manufacture lithium chemical we have to jump through the hoops. The only other way is for Joe and the bod to get on the game I doubt that will raise much cash though.