cashflow and xstrata, page-3

With respect a positive BFS is a done deal.

Mose of that info was released in the 'initial' BFS back in February. All that remains is fine tuning....sdeemingly we'll see lower capex and lower opex (based on the recent Quarterly Report).

Worth remembering the words of Peter Landau in the Q & A attached to a presentation made in Sept. 2009:

"On completion of the BFS, Xstrata will have the right to earn up to 50% of the Project by totally funding the development of the two new mining and processing complexes. At this preliminary stage, it is anticipated that the Projects capital expenditure requirements would be approximately US$1.5bn which would be funded by Xstrata. At this stage it is anticipated that the remaining 50% of the Project will be held by Nkwe. Genorah Resources, Nkwes major shareholder and BEE partner will, upon the decision to mine, own more than 65% of Nkwe, enabling the 50:50 Xstrata/Nkwe joint venture to be created at project level.

Xstrata has exclusivity on the project and the option is a binding commitment for Xstrata to exercise except if the BFS is negative. The completion of the BFS is an essential step for the establishment of a project of this nature. The benefit of Xstratas involvement at this early stage is that a very high level of expertise will be brought to bear on the Project. This will have two benefits, firstly that the Projects planned development achieves an optimal outcome for all parties and secondly, should Xstrata proceed to fund the development, the Project implementation time table will be significantly reduced.

Xstrata has stated that they regard the Nkwe/Genorah project as one of the best opportunities for them to gain a foothold in a consolidated position in the highly prospective Eastern Bushveld. The ability quickly develop a new vertically integrated mining and processing operation with up to 1M ounce PGM per annum capacity should be particularly attractive and provides Xstrata an excellent opportunity to move towards becoming the No 2 PGM producer in the world."

In particular the words:

....the option is a binding commitment for Xstrata to exercise except if the BFS is negative. "

Now deals often get tweaked, renegotiated etc but they are strong words......

Time will tell.