Hi CW (and others),without wanting to weigh heavily into your...

Hi CW (and others),

without wanting to weigh heavily into your debate here, I just wanted to add another thought for discussion based on a comment of yours above.

" ...that if the Chinese company does well then that is good for China. That means earnings going home, the company has to be profitable for China to benefit. This is a positive for FML not something sinister to stress about."



Now I agree with what your thinking, it makes perfect 'westernised' commercial sense, we are in business to make money, to make profits and bank them, ultimately into our back pockets.


But here is my spin, and it is why I am reluctant to give up control, especially to someone as powerful as the Chinese.


OK, scenario, FML uses the 240mil and pumps it into the ground, starts to make big finds etc etc all going well, then phase 2 comes in, We want to grow even BIGGER, and fast, we need another capital injection..

Great we have Shandong onboard. Guys can we get another 500mil... sure they say... BUT, the chinese government steps in and says hey we want some more security.. HUH?..as if they dont have enough we say, you control us with 51%.. but no they play hardball, they stipulate that we must HEDGE 500k ounces at the current gold price, lets say its 2k per ounce.

Now our board AND our backers (who funnily enough are the chinese gov) have been forever telling us we are investing into a rising gold price, lets say forecasts that 3k per ounce is not all that far away.

Now here is the problem... FML shareholders are going to miss out on that extra 1k per ounce and so is Shandong, HOWEVER Mr Chinese Goverment, who has purchased our entire hedge of 500k ounces through another arms length but ultimately government controlled entity has a big win in the way of paying just 66% of what they would have had we been able to sell our gold at the higher market price to the spot market, and they had to buy it through such at 3k per ounce.


I don't believe I am veing too far fetched with this scenario, it's something I would certainly do if I was in their shoes... Thoughts?????


regards
Davo