Ann: Revised Proposal from Albemarle, page-743

In my opinion this proposal will never get to the finish line.

There are quite a few steps.

1. there has to be a scheme deed agreed and signed. The terms of that deed are quite important and I'm waiting to see what they say. In any event as the "best and final" proposal, ALB has its back to the wall because they cannot by law increase that price.

2. a critical step will be the "Independent Expert" report which will provide a valuation of our shares based on current status as well as future cashflows to arrive at a "fair and reasonable" value or range of values. Given where we have been trading alone, which we know to be subject to short selling etc, there is virtually $zero of change of control premium in this price. Even without the benefit of a balanced perspective of future supply and demand for our commodity which should see potential future increases in prices, the "fair and reasonable" test should fail. If it does, that will end the deal because the ASIC and courts will not approve it. Let's just use ALB's own forecasts for demand etc which although I can't quote them, I know they are very bullish.

3. Assuming we get to the vote, which I don't expect to occur, then based on the very reasonable change of control premium shareholders are usually entitled to, the $3 price is grossly inadequate. But consider how each and every shareholder will consider this $3 bid. In my opinion it's TOTALLY EASY TO SAY NO! It is only going to take 25% of shares voted to defeat this Scheme and send ALB packing. When it happens we will be 3 months closer to our holy grail of production and cashflows, and ALB will be unable legally to launch any new bid for a period of time (I think 4 months)

The main danger now in my opinion is not this bid, which seems destined to fail, but the prospect of a RIO or similar coming in pretending to be our knight in shining armour with a bid of say, $3.25. That would be a real tragedy, but the advantage we have is at the moment, time of commissioning is fast approaching and with it will come potential for a higher value.

There's so much to play out here!

Regards
DF