i give up, page-3

Yeah I don't know what to do with this one Kruiser.

Obviously the market is trying, no pleading, to get a message across to the directors. Let's hope they don't ignore it!

When you've been in this game for as long as some of us you eventually learn that the market is never wrong. It certainly loses its patience very quickly and ignoring it is not an option.

Up until the board mentioned that they are now focusing on the slurry pipeline option I was of the firm belief that they were targeting a mining operation by the end of next year with a CAPEX of around $105m - a time frame/costs situation which I was very comfortable with and one that I viewed as highly possible. So much so that I more than doubled my holdings. We're now told that the CAPX has quadrupled and the time frame, well who knows.

Clearly you don't commit any real funding for even the costs involved in planning of the slurry pipeline until you have achieved a successful trial mine.

So how long away is a trial mine?

....and once you've sorted all that out, the serious planning of a slurry pipeline commences. It takes time, a lot of time - funding, engineering and planning, bureaucratic red tape, environmental impact studies, native titles and private land permissions, site preparation, construction, testing, etc......

All that could be happening whilst the company is earning precious dollars.

Bear in mind that before any of the above commences they would need a resource upgrade to as much justify even thinking along the lines of a slurry pipeline. So now our starting point has been shifted to the end of this year. Not so for a 1mt p.a. initial road transport operation.

Oh wait, but there's more!

What difference in natural dilution are we likely to have by the cessation of the two time frames?

Get a mine up and running by the end of next year and set your goal at 1mt/pa.

Find a fertiliser coy to finance the $105m for CAPEX and for that they get 250,000 tons of rock phosphate for free (less expenses). We have excellent grades and low impurities, so we're looking at AU$165/t today (possibly +AU$200/t by end of next year). OPEX using the trucking option is AU$105/t, so:

- Annual production = 1,000,000
- Fertiliser coy = 250,000 free
- Full dilution = 150,000,000
- Profit = AU$60/t

((1,000,000 - 250,000) x 60)/150,000,000

EPS = 30 cents

P/E of 8 would give us a sp of $2.40

If rock phosphate prices are trading at AU$200/t, the sp would be more like $3.80.

Is it possible to truck 1,000,000 t/pa?

Yes I think so - a typical road train up that neck of the woods carries a load of 120t, and a truck could easily run two trips per day. Assuming that we exclude days during flooding, they could truck around 275 days of the year, so:

1,000,000/(240 x 275) = 15 trucks

Strive to succeed!!!