Feedback to CEO & Independent Directors, page-2

Great work pe981. Some further comments on the unacceptability of the FMS proposal below.

1 - Shareholders have repeatedly called for a substantial upfront payment to cover cost to FID and a substantial dividend to all shareholders. Despite claims that FMS has listened to shareholders this demand has not been met and not even commented on.

2 - The 2.5% royalty option is way too low and completely unacceptable. The IER gives no comparisons or industry norms for royalty payments. Compare this to the Canadian IO deal mentioned in HC posts recently (LIF). 2.5% just doesn’t pass the pub test, does it? I would expect a royalty option to be in the order of 8-10%.

3 - The proposal provides no modelling and projections. What exactly does this deal mean for shareholders apart from “maybe” going to production? It seems like a more “trust us” document. I don’t!

4 - The deal is unnecessary complex and difficult to understand yet if accepted gives control of our major asset to BBI.

5 - The document does not provide a value for our IO with a pathway to market.

6 - The risk outlined are far too great for the pittance of a reward muted.

7 - The IE takes estimates as provided as factual without testing those estimates.

8 - No minimum spend of $60m for BFS. No verification of the BFS spend required. How does that stack up with other companies BFS cost? Realistic?

9 - How does this deal compared to other industry JV’s? The proposal does not address this.

10 - The document makes no reference to the likely estimated returns to BBI or FMS. What will we make and what will they make assuming an average IO price of say US$55, US$65, US$75/t and exchange rate of 70c?

The overall deal is unnecessarily complex, gives the option of control to BBI and falls well short on reward for FMS shareholders IMO. The proposed deal is extremely disappointing IMO and I will be voting against it.

Please check my comments above as I do make errors. Comments and corrections are welcome.