Countdown to FID, page-61

Hi All,

I managed to get in touch with Lachlan today as I wished to emphasize our need for an update.

He said that he had looked at Hotcopper and was aware and sympathetic and said that he understands that need and that an update with be coming in the not too distant future. It won't be immediate however, as there are some things to work through before he is ready to give that update.

He reiterated his point in the last report that the recent fall in the cu price has put a dampener on the economics for the whole copper industry. While our project is still economic at current price level. He also suggested, predictions of further price falls from some of the "major" financial experts are an issue.

One thing that I have not considered that Lachlan did mention was that now might not be the best time to lock in hedging, as while this protects us from the downside which lenders like, it will also lock in a longer pay pack period if done at a lower price level.

He also suggested that the commencement decision is no longer as clear as it was because the recent drilling results may make it more economic to start with a larger project. While the price was high and the extra resources not proven it was a no brainer to get started ,but now the picture is less clear. In view of this, the board has decided to gather more information and consider where to from here.

I also asked about the continuous mining machine. They were disappointed with the amount of progress the machine made but it has made progress for us at minimal cost. The upside is that we have been able to install various mine systems using the tunnels that have been cut which shortens the startup period after FID. He also said that even if the machine had performed as expected, there were never any plans to make it a permanent feature of the mine going forward.

So I hope this helps, but because of limits on what Lachlan could say to an outsider like me, we must still wait for the update so that everybody has the same information once its ready.