Ann: Quarterly Report and Appendix 5B , page-11

George. Study a couple of the company's announcements re Watershed from late 2008 (on the ASX website) and it should explain itself reasonably well. Unfortunately your simple analysis doesn't fit with reality. You'll see that the smaller mine option would process around 450,000t of ore p.a. with a profit margin of around $20/t (at the time, Sep. 2008, with Wolfam Oxide at around $250/mtu and exchange rate at AU 0.70). That equates to around $9M p.a. profit before tax. Now with WO at around $425 and exchange rate at about AU$1.09 it would be a little better but not by a great deal. Better if the AU$ fell below US$1 again. Tungsten is more complex than other metals to value, that's for sure, with the % value of WO playing a big part. I'm no expert on this but I think my take is about right.