hypothetical question, page-5

lagunbay,

the answer is the value of the ore in the ground (Matty always wants to make the formula complicate and tantalize with a sprinkle of China political intrigue).

Around 2011 I did the sums on this and got an answer of about $1.00 per tonne of iron ore in the ground ( this figure was based on a metal weighted average for all io deposits transacted in Africa in the preceding three year period).

The original Hanlong offer to sdl shareholders equated to the value of the ore in the ground. Full stop. Not very complicated at all.

IMO this offer won't be seen ever again.

Put yourself in the tender bidders shoes. What has sdl spent on the ground? Without checking lets say about $50 million. What does sdl expect me to spend before I can make my first dollar from the project? Without checking lets say I need to spend $3.5 billion. 70 TIMES MORE than sdl has contributed.

How much of the project would I want to own after I have spent 70 TIMES MORE on the project than my JV partner?

I leave it to you guys to figure out.