Ann: Trading Halt-AVQ.AX, page-47

Hi Red

But I think that this is the whole problem with the current situation and that is that it is so unbalanced on returns for the magic circle and the returns for the rest of the shareholders.

I'm not talking about his wages or small beer like that.

ALL IN THEORY BUT:

The way the last fundrasising was structured was beyond the pale. It took advantage of our desperate situation and set up an exploding payday for the select few.

Lets say for arguments sake that Isabel is returned or San Jorge gets worked up to a viable project and some value does come into the company. Then say another company a lot larger with established track record and experience in actual mining wants to take us over and develop these assets with much more clout. Lets Say They offer 75 cents a share on a fully diluted basis so $325 million.

Most shareholders would double their money from most peoples averages. .. but its been a long painful road and doubtful that many would be over thrilled at that. Definitely no retiring or 4 houses etc etc.

BUT

thanks to the clever funding arrangements put together in April. The magic circle would exercise all their options and make a $53 million profit. IMO that's the game that's in play here ...not a small DSO operation.

Don't forget that by exercising these options they would have 35% of the company.

So the returns for a small group compared to the rest of the shareholders is so so far out of equilibrium that its crazy.

That's why people are instinctively cautious of this stock.