fall back due, page-9

re: fall gathering speed for b2 B2

Not sure if I understand your comment regarding a deeply discounted share issue. Are you implying that AMU would need to issue shares if it chose to eliminate the $5.6 million liability overhang you see.

I would have thought that with the amount of cash they are pulling in on current production and attractive oil and gas prices this possibility would be almost non-existent.

AMU’s announcement of 14 Feb suggests FY2002-03 will be an excellent year for them with estimated sales of A$11.5 million and EBITDA of A$5 to $5.5 million. Of this EBITDA, I would imagine well over A$4 million would be free cash flow. Seems like plenty to meet liabilities and have a good bit over for the occasional acquisition.

This free cash flow from their operations does not appear to be sporadic either. Their operations have in the past thrown off a fair bit of cash, even if the accounting profit doesn’t reflect it. And with FY2003-04 having a full 12 months to benefit from the significant production acquisitions and Red Creek drilling success in the December 2002 quarter, next FY looks like it too will throw off plenty of cash. Surely enough to cover those liabilities?

Comments appreciated.

S