Ann: Update on Razorback Farm-In Offer, page-3

Vis

We are singing from the same hymm sheet - just to recap some basic details as I see them :-

* the size of the deposit is confirmed as being 3.9B tonnes (2012 Jorc)
* the ore is soft rock with little or no overburden - therefore lower mining costs than in the Pilbara
* located just 45km from rail, 100kms from power and 200kms from deep water ports
* the deposits are located within only a portion of the Company 100% held leases - maybe scope for additional o re
* have spent approx $35m in exploration costs during the past 12+ years to get to this stage
* have previously sent samples of ore to overseas steel mills for beneficiation which produced a very high Fe 68.5% grade pellet product
* Fe 68.5% grade ore attracts a premium price of US$15 to US$25 per tonne above the standard Fe 62% grade ore - adding to profitability
* previous Management focussed on becoming a large producer requiring large Capex
* now focussed on becoming a lower tonnage, highly profitable producer requiring substantially less up front Capex
* have exclusive rights to the NextOre ore sorting process system developed by the CSIRO that diverts the processing of low grade ore increasing the average grade of plant feed by 50% adding to profitability - the NextOre system is already being used commercially for copper mining
* new engaged "hands on" Management to drive the Company forward
* cashed up with sufficient funds on hand for the next 12-15 months
* yesterday's announcement says - "Until a binding agreement is concluded the Company will continue to assess and pursue all opportunities for development of the Razorback Iron Ore projuect" - seems they may still be in discussion with others.

Whilst I'm not a mining engineer, I would have thought the current market cap of approx $4.5m (inclusive of $1m in cash) remains below true value and question why the market cap should not be nearer to $25m at this stage - this is all in my own opinion.

I remember reading a book on Warren Buffett some time ago and his underlying view was - "always buy stocks that are under valued" - that may be the case here ..... who knows ....... only time will tell.