lyn contract to go ahead?, page-9

Hi Mookie,

Refer to adds4's response to your query. It reflects my exact sentiment. If you refer to HGO's report, it mentions they are continuing to work with Abesque Engineering in relation to the project.(Abesque is a subsidiary of Forge Group). Abesque actually mentioned the option to Hillgrove about the potential for dismantling and re-configuring an existing plant for their Kanmantoo mine.

As Adds4 mentioned, margins should be decent. We are now just waiting patiently for the Kanmantoo mine approvals. Hopefully it comes out soon, when the Cu price is still strong.

MikeM, the EPS for 2H FY'09 is around $0.13/share. It will be hard for them to make a payout ratio of $0.07/share (> 50%) at this point in time. FGE is still a growth company, so it needs to conserve capital for future projects and potential expansion. Note that part of the FY'09 $14mil NPAT is from their 1H Fy'09 NPAT of $5.1mil. 2H FY'09 NPAT should be around $8.9mil.

However, I will be pleasantly surprised to see them pay a 7 cent div. We are all shareholders so, the bigger the div. the better. :) In my opinion, it is more likely < 3 cents/share (if any).

As for Lynas corp, I should take more caution in my words. All I hope is that LYC's shareholders will have a satisfactory outcome for their funding needs and in turn it will benefit FGE too. At this point in time though, I really cannot see someone else coming in to help out LYC, other than a Chinese firm. Most of the big miners have their own issues (Xstrata, Anglo American, Rio Tinto etc.) BHP on the other hand is more interested in their existing suite of commodities & have more than enough organic growth from their projects. Hopefully banks are more open towards funding growth projects again. Let's keep our fingers crossed.

All that said, all shareholders are on the same page. We want FGE to grow and pay great divvys along the way. Well done to the FGE management team so far. We shall wait in anticipation for their results next week!

Happy investing.