Ann: Trading Halt , page-20

I agree col8 - it has been what I have been saying for a while. How they were able to achieve and start drawing down on the finance without everything in place is beyond me. And recall they had commenced the project based in China before it was suddenly moved to Malaysia after they had already started drawing down facilities. Their announcements have not been transparent - in announcing the additional offtake on 13 Jan they advised that it was sufficient to satisfy the CP relating to offtake agreements. OK – so they don’t tell us that all CP’s are satisfied – however a transparent and honest announcement would advise what is not yet satisfied and what steps are in place to satisfy it.
If we go back to the announcement on the 24th Dec 2008 they advise of another CP being finalization of the funding plan to produce 10,500 tpa of REO. That apparently was announced on the 18th Dec – however clearly not approved by the bond holders by 24.12 who, rightly, would have been suggesting there is not enough funding, as the project continues to drift out from the startup date. That would then lead into the $30M stand by equity facility. My guess is that they are now trying to prove to the senior lenders that they do have enough funds, with that stand by facility, to achieve the 10,500 tpa production rate. They are probably also trying to extract an increase in the stand by facility if the bond holders do not agree.
In going through this probably they are OK, though there is going to be dilution. However the one minute to midnight nature of this worries me, and goes to management competence. If they do not achieve the outcome, I trust ASIC are all over them.
Fortunately, of course, they have 200,000 tonnes of ore sitting on pads at Mt Weld - about 18 months before they needed it. And the Directors all received a healthy swag of options at the AGM because of their evident competence.