Ann: Quarterly Activities Report , page-30

Hi guys, just finding the time now, to go through the last quarterly properly and there's something I don't quite understand. Maybe someone else could help.

I've misjudged the ROM at the crushing plant and I'm trying to find out what I did wrong. I think I made too many ASSumptions... perhaps not!

I went through the June quarterly (Q4 FY12) and found that 1,476,290t of material was crushed for the quarter. During that quarter I found nothing adventitious, so it strikes me as plain weird that the last quarterly shows 994,044t crushed.

I understand that there was LG ore to be shifted. But surely that has more to do with Toll trucking and moving the LG ore out of the way than anything to do at the crushing plant itself.

I don't understand why there wasn't a scalping issue during Q4 FY12, but there is now. The output at the crushing plant instead of at least remaining static, is crushing two thirds of the Q4 FY12. I also wonder if the closure of the crushing plant during Q1 FY13 was not only scheduled but also meant to address some teething problems at the crushing plant that maybe didn't fully work during the scheduled closure.

I'm no expert on crushing but I need to ask some obvious questions:

When was Watpac aware of a scalping problem?

Is Watpac hoping to be back to atleast a 5.8Mtpa run rate at the crushing plant with the new scalping circuit?

Are there on-going problems at the crushing plant?

My concern is there's potentially problems at the crushing plant that still need to be addressed by Watpac, I hope I'm wrong.

Why I say that is that the last quarterly states that the crushing plant will be at a run rate greater than 6Mtpa once the mobile plant is commissioned by the end of Feb. 2013.

If the prediction was made 8 months ago that once the upgrade at the crushing plant was commissioned (4Mtpa to 6Mtpa), the plant was expected to be at 5.8Mtpa, if not 6Mtpa.

Although 'greater than' isn't a precise number, my hunch can only be it'll be slightly over 6Mtpa without further information provided. And if the crushing plant was performing as predicted (5.8Mtpa), I would've thought a mobile plant was capable of more than 200,000tpa. As mentioned greater than isn't a precise number, but it indicates to me that there are on-going problems with Watpac's 5.8Mtpa prediction 8 months ago.

Let's hope things can be sorted out if I'm right.

ALL speculation.

Please, I AM NOT saying that Watpac Contracting or BCI management have not been fully upfront with shareholders.

I'm just wondering if there are on-going issues with the crushing plant that still need to be addressed.