stephen.... Thats ones thing Harry doesn't like going into...

stephen.... Thats ones thing Harry doesn't like going into detail about is it. He mentions something 'bout "commercial intrests" in his investor teleconference below if you haven't read it yet.




INVESTOR TELECONFERENCE BRIEFING
Thursday 01 February 2007
by Harry Kenyon-Slaney, Chief Executive
on 2006 ERA Annual Financial Results
GOOD MORNING LADIES AND GENTLEMEN
MY NAME IS HARRY KENYON-SLANEY AND I WOULD LIKE TO WELCOME YOU ALL TO
THIS PRESENTATION FOR ANALYSTS AND INVESTORS WHICH IS THE SECOND
YEAR-END BRIEFING HELD IN THIS FORM SINCE THE RESTRUCTURING OF THE
CAPITAL BASE OF THE COMPANY LATE IN 2005.
THIS TELEPHONE CONFERENCE REPRESENTS MY LAST BRIEFING TO YOU. AS
OUTGOING CHIEF EXECUTIVE OF THE COMPANY I WILL SHORTLY BE LEAVING TO
TAKE UP A NEW POSITION WITHIN RIO TINTO. I AM SUCCEEDED BY CHRIS
SALISBURY, PREVIOUSLY THE GENERAL MANAGER OPERATIONS OF THE
COMPANY, WHO WAS APPOINTED TO THE BOARD YESTERDAY.
I AM JOINED BY CHRIS BATEMAN, THE CHIEF FINANCIAL OFFICER AND BY AMANDA
BUCKLEY – MANAGER EXTERNAL RELATIONS.
THE PURPOSE OF TODAY’S PRESENTATION IS TO PROVIDE YOU WITH A BRIEF
OVERVIEW OF OUR 2006 RESULTS AND, FOLLOWING THIS, TO GIVE YOU AN
OPPORTUNITY TO ASK CHRIS AND ME SOME QUESTIONS.
FROM AN OPERATIONS PERSPECTIVE 2006 PRESENTED US WITH A NUMBER OF
SIGNIFICANT CHALLENGES. AS PREVIOUSLY ADVISED THE EXTRAORDINARY
RAINFALL DURING THE 2005/06 WET SEASON, EXACERBATED AS IT WAS BY THE
EFFECT OF CYCLONE MONICA, LIMITED OUR ACCESS TO HIGH GRADE ORE IN THE
PIT IN THE SECOND AND THIRD QUARTERS. THE RESULT WAS THAT ANNUAL
PRODUCTION FOR THE YEAR WAS REDUCED BY 20% TO 4,748 TONNES. THIS SAID
THE RECOVERY IN THE FOURTH QUARTER, WHICH REPRESENTED A NEW
PRODUCTION RECORD FOR THE COMPANY, WAS PLEASING.

IT IS ALSO PLEASING TO BE ABLE TO REPORT A FURTHER IMPROVEMENT IN THE
COMPANY’S SAFETY PERFORMANCE. THE NUMBER OF EMPLOYEES THAT
SUFFERED AN INJURY THAT REQUIRED MEDICAL TREATMENT REDUCED FROM 14
IN 2005 TO 10 IN 2006, A 28% REDUCTION. IT IS OUR FIRM BELIEF THAT IT IS
POSSIBLE TO PERFORM WITHOUT HARMING ANYONE AND THE SENIOR
MANAGEMENT TEAM WILL BE REDOUBLING ITS EFFORT TO CONTINUE THIS
POSITIVE TREND IN 2007.
FULL YEAR EARNINGS ROSE 7% TO $43.6 MILLION. THIS WAS DRIVEN BY A RISE IN
THE AVERAGE REALISED PRICE OF URANIUM OXIDE FROM US$16.00/LB TO
US$18.36/LB, OFFSET BY COST INCREASES AND A PARTIAL WRITE OFF OF THE
ACID PLANT.
I WOULD LIKE TO TACKLE THE REVENUE SIDE FIRST.
SALES VOLUMES ROSE MARGINALLY OVER 2005 TO 5,760 TONNES. THE LOWER
PRODUCTION IN THE SECOND AND THIRD QUARTERS MEANT THAT A SMALL,
SHORT TERM LOAN WAS OUTSTANDING AT YEAR END, BUT I CAN ADVISE THAT
THIS WAS REPAID IN JANUARY 2007.
ONCE AGAIN THE REALISED AVERAGE PRICE ERA ENJOYED FOR ITS PRODUCT
FELL WELL SHORT OF THE LONG TERM MARKET PRICE WHICH ROSE A FURTHER
99% TO END 2006 AT US$72/LB. AS I HAVE REPEATED OFTEN, THE PRICE CAPS
THAT WERE FORCED UPON PRODUCERS IN WEAKER MARKETS WILL CONSTRAIN
THE UPSIDE DISPROPORTIONATELY IN SUCH STRONG MARKETS. THE COMPANY
HAS A STRONG PRESENCE ACROSS ALL MARKET REGIONS AND WE HAVE BEEN
LETTING NEW CONTRACTS AS OLD ONES EXPIRE THROUGHOUT THIS UPWARD
CYCLE. THESE NEW CONTRACTS, WITH ZERO VOLUME FLEXIBILITIES AND EVEN
DELIVERIES ACROSS THE YEAR, WILL RESULT IN ENHANCED EARNINGS IN THE
YEARS AHEAD.
I APPRECIATE YOUR DESIRE TO UNDERSTAND MORE PRECISELY THE EARNINGS
IMPACT OF OUR CHANGING CONTRACT PORTFOLIO. HOWEVER, IN THE PRESENT
TIGHT MARKET, I CONTINUE TO BELIEVE THAT AS A PURE URANIUM SUPPLIER OUR
GEARING TO THE MARKET PRICE, AND OUR FORWARD COMMITMENTS, REMAIN
SENSITIVE PIECES OF INFORMATION THE RELEASE OF WHICH IS NOT IN OUR
COMMERCIAL INTERESTS.
THE SECOND MAJOR INFLUENCE ON EARNINGS HAS BEEN A RISE IN COSTS.
WHILST PRODUCTION WAS LOWER, EMPLOYEE BENEFITS AND CONTRACTOR
EXPENSES ROSE BY A$22.9 MILLION OVER THE PRIOR YEAR, OFF SET BY A$9.1
MILLION REDUCTION IN RAW MATERIALS USAGE. WHILE THERE WAS CERTAINLY
AN INDUSTRY WIDE ELEMENT TO THIS (THROUGH CONSUMABLES PRICING,
CONTRACTOR RATES AND EMPLOYEE REMUNERATION) THERE WERE ALSO SOME
SPECIFIC AREAS THAT MERIT MENTION. THESE WERE THE COSTS OF RECOVERING
FROM THE WET SEASON NOT COVERED BY INSURANCE CLAIMS (FOR EXAMPLE
WATER REMOVAL, PUMPING, IRRIGATION SYSTEM OPERATION), THE IMPACT OF
THE SHORTAGE OF SULPHURIC ACID THAT WAS DISCUSSED AT THE HALF YEAR,
THE EXPANSION OF THE EXPLORATION PROGRAMME AND A GREATER USE OF
CONTRACTOR SERVICES TO DRIVE IMPROVEMENT.
THE COMPANY HAS BEEN CONSUMING MORE ACID THAN IT CAN PRODUCE FROM
THE EXISTING PLANT THAT IS NOW 25 YEARS OLD. A TOTAL OF $6 MILLION WAS
SPENT ON IMPORTING EXTRA ACID DURING THE YEAR. A NUMBER OF LONG TERM
OPTIONS TO REMOVE THIS CONSTRAINT HAVE BEEN INVESTIGATED AND WE
WOULD LIKE TO ADVISE THAT FROM THE THIRD QUARTER 2007, THE ACID PLANT
WILL BE DECOMMISSIONED AND THE COMPANY’S ENTIRE REQUIREMENT WILL BE
IMPORTED THROUGH THE PORT OF DARWIN.
A FIVE YEAR CONTRACT HAS BEEN SIGNED AND CONSTRUCTION OF STORAGE
AND UNLOADING INFRASTRUCTURE BY THE VENDOR IS ALREADY UNDERWAY.
THE EXISTING PLANT, WHICH STILL PRESENTS AN OPERATIONAL RISK, WILL
CONTINUE TO OPERATE UNTIL ALL SULPHUR STOCKS HAVE BEEN CONSUMED,
WHERE UPON THE REMAINING ASSET VALUE WILL BE WRITTEN OFF. A CHARGE OF
$4.7 MILLION WAS TAKEN IN 2006 COVERING REHABILITATION WORK OVER THE
PAST 18 MONTHS RECORDED IN CONSTRUCTION WORK-IN-PROGRESS AND A
SIMILAR CHARGE CAN BE EXPECTED IN 2007.

THE COMPANY CONTINUES TO INVEST IN THE REFURBISHMENT OF THE PLANT
AND EQUIPMENT IN ORDER TO SUPPORT CONSISTENTLY HIGHER PRODUCTION
RATES. THIS HAS INVOLVED A RISE IN EMPLOYEE NUMBERS AND AN INCREASE IN
THE USE OF CONTRACTORS IN AREAS SUCH AS MAINTENANCE, TECHNICAL
STUDIES, EXPLORATION DRILLING, ACCOMMODATION AND SUPPORT SERVICES.
THIS REFURBISHMENT HAS BEEN THE PRIMARY USE OF CASH OVER RECENT
YEARS. LOOKING FORWARD, THE STRONG MARKET PRESENTS ERA WITH A
NUMBER OF OPPORTUNITIES TO BOTH INCREASE AND ADVANCE OUTPUT AND TO
EXTEND ITS OPERATIONAL LIFE.
IN OCTOBER LAST YEAR THE COMPANY ANNOUNCED THAT PROCESSING
ACTIVITIES WILL BE EXTENDED FROM 2014 TO 2020 THROUGH THE SCREENING OF
LOW GRADE STOCKPILES. THIS RESULTED IN ORE RESERVES INCREASING BY
11,100 TONNES OF URANIUM OXIDE.
IN PARALLEL, WE HAVE BEEN WORKING ON IDENTIFYING WAYS OF ECONOMICALLY
EXTRACTING MORE OF THE URANIUM CONTAINED IN THESE LOW GRADE
STOCKPILES. YESTERDAY THE BOARD AGREED TO THE EXPENDITURE OF $13.2
MILLION ON ONE RADIOMETRIC SORTING UNIT. THIS TECHNOLOGY, WHICH HAS
BEEN USED SUCCESSFULLY IN THE PAST AT THE MARY KATHLEEN MINE, ALLOWS
MATERIAL CONTAINING A HIGHER URANIUM GRADE TO BE SORTED FROM
MATERIAL CONTAINING LESSER AMOUNTS OF URANIUM. THIS PROJECT, WHICH
HAS THE POTENTIAL TO BRING FORWARD AN ADDITIONAL 1,100 TONNES OF
URANIUM OXIDE INTO THE PERIOD 2008 TO 2013, WILL ACT AS A TRIAL FOR A
POSSIBLE WIDER APPLICATION OF THIS TECHNOLOGY ON THE REMAINING 40
MILLION TONNES OF LOW GRADE WASTE MATERIAL THAT IS PRESENTLY
STOCKPILED ON SURFACE.
IN ADDITION TO INVESTIGATING THE PROCESSING OF LOW GRADE MATERIAL, THE
COMPANY HAS SHARPLY INCREASED ITS GEOLOGICAL EXPLORATION ACTIVITY
DURING 2006. WE CURRENTLY HAVE FOUR DRILLING RIGS OPERATING IN THE
AREA TO THE EAST AND SOUTH OF THE RANGER PIT AND WE HAVE ALREADY
COMMUNICATED OUR OBJECTIVES FOR THIS PROGRAMME, AND RELEASED SOME
ENCOURAGING DRILL DATA.

AS A RESULT I CAN ADVISE THAT YESTERDAY THE BOARD APPROVED THE
EXPENDITURE OF $5 MILLION TO CONDUCT A FULL FEASIBILITY STUDY ON THE
POSSIBILITY OF A MODEST EXPANSION OF THE OPEN PIT. THE STUDY, WHICH
WILL BUILD ON A PRE-FEASIBILITY STUDY CONDUCTED LATE LAST YEAR, WILL BE
TARGETING UP TO 6,100 TONNES OF CONTAINED URANIUM OXIDE PRESENTLY
INCLUDED IN RESOURCES. IF SUCCESSFUL THIS WILL LEAD TO AN EXTENSION OF
MINING IN THE PIT FROM 2008 TO 2011. THE CRITICAL ISSUES TO BE INVESTIGATED
FURTHER IN THE STUDY ARE TAILINGS AND WATER MANAGEMENT, MINING
SCHEDULES AND CLOSURE PLANNING.
EXPLORATION WORK IS ALSO CONTINUING TO DETERMINE WHETHER THE RANGER
3 OREBODY EXTENDS FURTHER TO THE SOUTH EAST AT DEPTH, AND ON RANGER
18 EAST. WE WILL KEEP THE MARKET INFORMED OF PROGRESS ON THESE
IMPORTANT INITIATIVES OVER THE COMING YEAR.
THE COMPANY’S FOCUS ON A WIDE RANGE OF VALUE-ADDING PROJECTS HAS
INCREASED THE NUMBER OF EMPLOYEES AND RAISED ECONOMIC ACTIVITY IN
JABIRU. RELATIONSHIPS WITH THE COMMUNITY, AND PARTICULARLY
TRADITIONAL OWNERS AND THEIR REPRESENTATIVES, CONTINUE TO IMPROVE
AND THERE EXISTS INTERACTION ON MANY FRONTS, INCLUDING CULTURAL
HERITAGE MANAGEMENT, CROSS CULTURAL TRAINING, AN INCREASE IN SCHOOLBASED
TRAINEESHIPS AND LONG TERM CLOSURE PLANNING. IN PARALLEL, THE
FUTURE OF THE LOCAL TOWN OF JABIRU IS BEING ACTIVELY DEBATED AMONGST
KEY STAKEHOLDERS INCLUDING PARKS AUSTRALIA, NORTHERN TERRITORY AND
COMMONWEALTH GOVERNMENTS AND LAND OWNERS.
THE HEIGHTENED LEVEL OF INTEREST ACROSS AUSTRALIA IN THE URANIUM
INDUSTRY, SUPPORTED AS IT IS BY THE OUTCOMES OF THE VARIOUS
COMMONWEALTH GOVERNMENT-COMMISSIONED INQUIRIES INTO URANIUM
MINING AND NUCLEAR POWER, CONTINUES TO DRIVE SPECULATION OVER THE
PROSPECTS FOR THE DEVELOPMENT OF JABILUKA. I WISH TO REITERATE THAT,
IN LINE WITH PREVIOUS STATEMENTS, WE REMAIN COMMITTED TO THE PROJECT
BUT ONLY ON THE CONDITION THAT THE TERMS OF THE AGREEMENT STRUCK IN
2005 WITH THE MIRARR AND NORTHERN LAND COUNCIL I.E. THAT DEVELOPMENT
SHOULD ONLY PROCEED WITH THEIR CONSENT, ARE MET. WHAT I CAN SAY IS
THAT, IN PARALLEL WITH OUR WORK IN THE COMMUNITY, ALL PARTIES WITH AN
INTEREST IN WEST ARNHEM LAND ARE CONSIDERING THE IMPLICATIONS OF THE
RECENT EXTENSION OF OPERATIONS AT RANGER OUT TO 2020.
LOOKING FORWARD THE OUTLOOK FOR URANIUM MINING APPEARS POSITIVE AS
EVIDENCED BY THE MAGNITUDE OF THE CHALLENGE OF CLIMATE CHANGE. ERA IS
POSITIONING ITSELF TO BENEFIT FROM THIS BY SEEKING EVERY OPPORTUNITY
TO ADD VALUE BY EXPANDING, EXTENDING OR ACCELERATING OUTPUT.
FROM A PERFORMANCE PERSPECTIVE, THE COMPANY EXPECTS SALES IN 2007,
POSSIBLY ACCOMPANIED BY A MODEST REPLENISHMENT OF INVENTORY IN THE
LOGISTICS CHAIN, TO BE SIMILAR TO 2006.
FINALLY I WOULD LIKE TO THANK YOU ALL FOR YOUR SUPPORT AND INTEREST IN
THIS COMPANY DURING MY TENURE IN WHAT HAS BEEN A MOST EXCITING AND
CHALLENGING PERIOD. I AM SURE YOU WILL OFFER THE SAME SUPPORT TO MY
SUCCESSOR, CHRIS SALISBURY.
WITH THAT, CHRIS BATEMAN AND I WOULD BE HAPPY TO TAKE QUESTIONS.

END.