Management Discussions Update

Dear all,

Just to let you know, I have had a number of discussions with Jamie and Ross over the last few weeks. As I suggested in my previous post, we have been putting many difficult questions to them to understand how they are going to steer this ship going forward; with more detail requested on our prospective Nueva Esperanza partner, ideas on management and board changes assuming we get a settlement, and most importantly some ideas to get some cheap financing into the business to strengthen our negotiating position with Thailand and provide us more flexibility in deciding whether we settle or enforce an award.

I put forward an expression of interest to provide non-recourse financing to the company on a pre-award basis using capital protection insurance with a 10-12% cost of capital. The company was initially receptive to the financing idea but did not want to take the initiative to have follow up calls with some of the counterparties required to put together such a deal and prefer to take a wait and see approach, as RSK always does. I would personally like to see them be more proactive with this and would ask you to also push them for more feedback. What do they have up their sleeve?

Additionally, we put forward an idea to create some enterprise value for all of us whilst reducing the contingent subrogation liability that will be left outstanding. This is the second time we have put this idea forward in months. It was complex and not an idea I expected our 70-odd year old average age management team to grasp, but they just don't get it. In fact, I think they have dropped the ball on this and view me as predatorial in trying to help us all.

I did also suggest on many occasions that the management team host a call with investors after these quarterly numbers. Let's remember we haven't spoken to management since we heard RSK's ridiculous 10-minute outburst on global warming and climate change denial bull**** at the AGM. The NE deal and Thailand outcome will confirm the fate of this company and our investments. The management team need to get out in front of investors and walk us all through what is going on. It is the basic duty owed to shareholders. I have also suggested that Clifford Chance take part in this call and can explain the arbitration process for all investors. Whilst I am certain they cannot speak on the case itself, they can answer questions we have on how these proceedings work, timing, etc. If the management do not follow through with this request, they can only be described as petulant.

Last - the buy-back is interesting, but was it done to reinstall confidence and quieten us down or do they have visibility on the Nueva Esperanza deal or a settlement. I also asked RSK why he wouldn't use his own personal wealth to acquire stock. He is a wealthy guy, with a lot of Sydney real estate judging by land registries we have taken a look at and holds directorships at many interesting companies, so it would be good to see him step up to the plate.

It feels like management have now cut me off after all the tough questions and ideas coming there way. It almost seems like RSK sees me as the second coming of Michael McNeilly (Metal Tiger). This is very frustrating as I have been very helpful to the management team, previously providing them with contacts to third-party experts and advisors to make sure that the case was being run properly.

As I said previously, I wish we had a different team steering this ship. I think RSK et all will suffice for the coming months and as a first priority, we need to make sure a settlement gets done, but I expect more. Especially when they have investors doing the heavy lifting for them whilst they just sit back and wait for Prayut to fold his hand.

Anyway, there is a lot more to come on all of this. We will make sure we get this right.

Best regards,
Hfguy