new orders, page-152

"Personally I think it is time for Tony to outline the true benefit of WEG and the alternatives if they were not involved. "

Hi Insaf - didnt he do that in the post below ?

Hi guys,

Firstly let me jump to the defence of humble69, I think his questions are legitimate and they were always going to be raised anyway, either here, the AGM or by email/phone.

Humble does contact me regularly as he has a lot riding on PLV. He, like a couple of others who post here, are top 20 shareholders and have invested a lot of money in the company. All of them are way behind on their investment.

That doesn't mean he is more important than any other shareholder, I am just trying to point out he will go into every detail of everything we do because he has a lot riding on it. Yes his questions are very relevant. He has always been a very supportive shareholder and has had concerns like anyone else has had.

I believe the IE reports are very clear.

Basically if the shareholders vote no to WEG becoming a JV partner then we would need to repay the initial $3m they gave us to save the Cockatoo deal. That’s it.... we don't have to repay the presales as they are presales with Pluton, we don't have to repay the US$23m on the off-take agreement as it is an agreement with Pluton.

Of course IF shareholders vote yes WEG gets half these benefits and half the liabilities.

The fact is, WEG have been acting as a JV partner since August 1st... they pay half the bills, they get half the benefits. They have taken a huge risk because, basically, if you vote no Pluton gets all the benefits, outside of the marketing agreement which stays in place whether they are JV partners or not.

For me the issue comes down to three points:

1) Do they deserve 50% for basically a financial loan?

IMO yes they do. When the Aussie entity didn't give us the $3m on the 31st July we were about to lose Cockatoo, we had little money and there was very little chance of doing a capital raising. Did they save our asses? Yes I think they did.

Plenty of people will say they were the ones who got us into this problem anyway. I said it here before Timeone (now WEG) were also a victim when SST pulled out of a binding deal. They stood to lose more than any other single shareholder.

WEG have proven they can raise money fast as a marketing agent when we needed them to. Organising pre-sales when we didn't even own Cockatoo is no small feat. I can’t go into the commercial terms of the 1mt off-take agreement because they are confidential, except to say the cost to Pluton to have the money to pay for the bonds is very close to our own CPI. That is a great deal......

2) What happens if you vote no?

Pluton would own 100% of Cockatoo and have to repay $3m on demand. No big deal, and in the short term we would be better off.

The fact is WEG have shown us what they can do when we need them most. We have a very important relationship with them regarding a little island to the east of Cockatoo called Irvine.

WEG have proven, to me at least, that when we get closer to needing finance for Irvine they have the contacts and capacity to fund a large slice of Irvine, at very good rates.

Will they drop that opportunity if they don't get 50% of Cockatoo? I don't think they would however why would we even risk that scenario?

3) Do we want to do a SST on WEG?

I know it is different as our agreements are subject to shareholder approvals, but really we have made WEG do all the hard work to prove themselves and then to be defeated on a vote would be somewhat disappointing. Integrity is very important in the business world as it is in all our own lives. You earn it, but it can be lost very quickly. This is not to say that if shareholders voted NO we have an integrity issue, rather I know how we all felt when SST pulled out.

I know WEG are somewhat secretive and there is not a lot of detail retail shareholders can find about them, and that can be frustrating and can lead to mistrust. They are very private people and there is only so much I can tell you due to the nature of our commercial arrangements. I have the advantage over all of you by dealing with these guys on a daily basis. These guys do have integrity.

All I can tell you is that they have the best intentions for ALL shareholders, they pumped in another $3m on 18 hours notice to keep us viable on a trust basis, they have proven they have the means and contacts to raise money under very good terms (forgetting the SST debacle, no one saw this coming….. who pulls out of a binding deal?), and they will play an important role in the Irvine development and in the potential Cockatoo underground..

Shareholders need to consider all these issues before they vote.

Every vote counts and I, personally, would understand why someone would vote against the JV. I certainly won’t be though.

A really good thread guys, good to see debate on something worthwhile debating.

Looking forward to buying a few beers for those that are able to come to the AGM.


Cheers, Tony.