future......

The CITIC deal is the future of the whole development of Cape Preston. With out them I think it would be back to the drawing board. Just looking at their past announcements it seems there will be 3 purchases from CITIC pacific to Palmer and his numerious companies. I have cut a past the three stages below. the first one has occurred already. Now the second is yet to occur but by all reports they are drilling the central block to justify the resource (as per the agreement). If and when this second stage occurs, I would think that CITIC would be too far in to pull out.. Now just a very interesting thing I have picked up is the following; is their any chance ARH would be this substitute company? If so it could get a lot bigger than we think..... It gets too complex for this black duck, but Palmer has got 70+% of ARH for a reason!!!!!! Maybe wrong but food for thought......

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At any time within 15 months after the date of the Balmoral Acquisition Agreement, Mr. Clive Frederick Palmer may nominate another company, in any case to the satisfaction of the Company, to replace Balmoral as the company to be sold under the Balmoral Acquisition Agreement. Neither the Company nor the Balmoral Purchaser will be required to pay additional consideration for such substitution. Such substituted company will have identical rights as those which Balmoral is entitled or would be entitled pursuant to the Balmoral Acquisition Agreement, including but without limitation, the right to extract from the Mining Area 1 billion tonnes of magnetite ore.
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LETTER FROM THE BOARD
– 11 –
The table below summarises the key details of the Project:
Conditions
precedents to
Assets to be acquired Agreement Consideration the acquisitions Other terms;
Right to extract 1 billion tonnes of magnetite ore in the
Mining Area through the acquisition of Sino-Iron
Sino-Iron
Acquisition
Agreement
Right to extract 1 billion tonnes of magnetite ore in the
Mining Area through the acquisition of Balmoral
Balmoral
Acquisition
Agreement

Options to acquire the right to extract up to
4 billion tonnes of magnetite ore in the
Mining Area (depending on how much is proven by the
Company under the further drilling obligation) through the acquisition of up to 4 further companies, each with the right to extract 1 billion tonnes of magnetite ore in the Mining Area China Project

First drilling obligation
The Company will carry out a drilling program to drill at least 100 holes over 18 months from the date of the Balmoral Acquisition Agreement within the Mining
Area. Once an additional 1 billion tonnes of magnetite ore (on top of the 1 billion tonnes made available to Sino-Iron) are identified by the Company after commencement of the drilling program, the Company will be under an obligation to acquire Balmoral subject to the consent from the Treasurer of Australia and pursuant to the Balmoral Acquisition Agreement as detailed below. The estimated cost for the
drilling program under the first drilling obligation is approximately A$5 million
(approximately HK$28 million).
Conditions and Completion
Completion is conditional upon (i) the Treasurer of Australia consenting, under
the Foreign Acquisitions and Takeovers Act 1975, to the acquisition by the Balmoral
Purchaser of the Balmoral Shares; (ii) the Sino-Iron Acquisition occurring; and (iii)
another 1 billion tonnes of magnetite ore resources (other than the 1 billion tonnes
to be available to Sino-Iron) being proven under the drilling program described below. Accordingly the Balmoral Acquisition is conditional upon the Sino-Iron
Acquisition, but not vice versa.
Completion of the Balmoral Acquisition shall take place on the date which is 5 business days after the last of the above conditions are satisfied or any other date
agreed by the Seller and the Balmoral Purchaser, but in any event no later than 31
July 2008.