east v.s. west conflict – read on!, page-9

Hi yellowcake,

Firstly appologies for spelling mistakes etc...i have been travelling over the last few days and doing posts via my pda at airports! All thumbs!

I have been a subscriber to hot copper before, however got frustrated by mostly uninformed discussion or debate on the basis of opionion rather than considering objective evidence. I just happened upon the TFC thread while hunting for updated broker reports post end June using Google advanced search - "tfs sandalwood" + updated web pages previous weeek. You suggest I went to a lot of effort to join H/C. The implication here is that I have opinion for a reason other than to share my views....which is what i though H/C was about. As you will note my opinion is considered and as noted in my post this is not a day trade stock....so not sure what you angle is...Again i prefer objective discussion over opinion and if my post are of no value to those also interested in TFC, then I will review the use of my time and energy. However given a + 2 thumbs up i will continue. Not all people on hot copper follow 'their company' on a daily basis and do indeoth research into the company model like I do...and happy to share these view.

You do pose some interesting points, however we must keep in mind the evidence - TFS is actively managing the growth of their trees, selected the most appropriate host species and ensuring growing conditions are optiomal. There is in affect a lot of intelectual property involved in all of this (barrier to entry). Some of the older trees sampled in 2008 stem back to early days / government trials and of course the genetics (selection of trees) were not as good back then, not managed optimally over the life of the trees (normal government trial approach). This is of course fully supported by the fact (read the summary of sampling results) that the TFC trees at 8 years nare old about the same size as the 14 year old ex government trial trees!

http://www.tfsltd.com.au/library/file/Adviser%20Info/YIELD%20PROJECTION_April%2009_Web.pdf

In terms of testing their own trees bear in mind the results clearly indicate they did.

Importantly it is worth remembering that the results of the trial indicate at age 14 years heartwood development and oil in the 14 year old trees was acceptable. Given the same environmental conditions of the region, but the more advanced TFC genetics and management of the "growing conditions" one can expect yields under these 'ideal conditions' should at least be equivalent results. Also more importantly oil development occurs more rapidly as the trees reach the 12 + year point. So the counter argument in all of this is that the bigger TFC trees could in fact exceed the oil content / tree relative to the trial ex government trees! I would sit more on this side of the fence.

The report support the view that the levels will be better with more optimal management (and larger trees at 12 + years). Also keep in mind TFC is being conservative in yield results "this prediction does not include any yield form the root and butt).

Remember also the 2008 trial simply aimed to demonstrate that the Kunanara grown trees produced oils of appropriate quality / content. This is the most valuable result of all in my mind. If they didn't - I would be on your side of the fence....however again the objective evidence supports otherwise.

In terms of them putting their own resources into testing their own trees. Well they did, the whole purpose of the trial was to establish the typical oil production expected from trees 'grown' in the Kununara area and to uderstand / predict the likelly TFC tree yield / oil at year 14 (the oldest trees they had were 8)- so the did use their own resources.

I suspect TFC management are very confident on oil development given the indication that they may harvest year 12 trees (2 years early)!

Also interesting that soon after these results were published we saw the Lush cosmetics announcement (including 1.80/share rights issue). If I was Lush I wouldn't have done this deal over the phone or via email......I would have come down to TFS and reviewed the results in detail. Spoken to the researchers / management and undertood the state of play completetly. Of course this is what Lush, Emirates and the perfumes houses are doing.

Those with negative views however seem to sit on the other side of the fence and conclude otherwise - purely on the basis of being sceptical. Very interesting :-)

Bear in mind I like these negative views as they serve to challenge my views which is great for revalidation of my assumptions. However I do pose the following challenge....if your only real concern for TFC is for the level of oil production and you are excited about the rest of the business model. Then do yourself a favour and visit / email management and ask the relvant questions on the oil production (as did a previous thread). By doing this you could come to an alternative perspective and find that diamond in the rough.

Small diamond