Ann: Second Infill Drill Results, page-22

G'day Ned,

Sorry I've been out of touch, just sitting back patiently watching everything fall into place.

Good post, I totally agree with your thinking. Those grades are very exciting! As I have suggested it is extremely rare for a high grade haematite deposit to exist as a stand alone, it's almost unheard of. I don't think the market understands that the resource is open to N/E and S/E - this is very positive! I will bet my left knacker that there will be extensions to the resource base here, but there is no hurry to do so. Use the cash to get to name-plate as quickly as possible and allocate free cash to expand the resource base in latter years - there will be plenty of accumulated cash in reserve, even after a 70% payout to shareholders. These guys have done a remarkable job to date!

Some estimates from the model:

Year 3, Production 1.33mt, Fe 62% US150/t, Payout 70%, Cost USD$60/t, AUD 0.76, Export 50% Domestic 50%, Share Price $0.10c, Mkt Cap $205M

1		EBITDA	9m
2	EBIT	$184m
3	NPAT	$138m
4	FCF	$136m
5	Div	$95m
6	Div/Share	$0.05
7	Yield	50%
8	Accum Cash Post Div	$93m

Sit tight, there is lots of fun to be had here!

Cheers

Pihrana