other possibilities for fas

Apart from the widely assumed implosion of FAS, a few thoughts on possible developments from here.

Looking at the other projects and tenements I can't see any of them taking off without a massive injection of funding. Further, none are as progressed as SHIP, which has native title and mining lease approvals in hand.

The SHIP is not a fully defined resource, (it remains open to the north and east of the project). This is not necessarily a bad thing as an increase in resource size has significant upside potential for the project.

You would think a lot of preparation went into the proposal for the 300 million share issue approval and the funding agreement. That kind of preparation would have to justify the financial feasibility of the project.

So the share issue approval lapsed on 9 August 2012. This is disappointing but may not be fatal to SHIP.

Why? While the approval sought by FAS to issue the shares was accepted by shareholders on 9 May 2012 (for 3 months operation), shortly afterwards an significant appointment was made to the Board of Directors.

"Mr Wan has a depth of experience in trading commodities, in particular with iron ore. He also brings technical expertise ...as well as a host of valuable contacts in the Hong Kong and China iron and steel industry." - FAS website.

It is well understood that in Chinese business culture, established contacts are very important to progressing matters.

As has often been stated, KR's preferred approach was to retain control and to be the sole operator.

At the point of the share rights approval, FAS was responsible for finding a buyer for the shares, ie. sophisticated investors. FAS was also responsible for finding an offtake partner to purchase the IO.

After this appointment, is it possible that deals might be brokered by Mr Wan with his Chinese contacts, which were previously considered off-limits such as a JV for sale of the IO, to purchase part of the project, and contribute towards the capex?

This might explain make sense of the delays we have experienced and are experiencing and make a 300 million share issue redundant. It also might put FAS in a stronger borrowing position to gain the remainder of what is needed to fund the project.

This is only a join the dots exercise, but it might be worth staying tuned.

Hopeful2 was indicating that the future for IO is not grim at all. He also pointed out that the future for SHIP was more promising because the capex is comparitively low compared to other projects.

The lower IO price might mean that deals need to be recalibrated, but the future demand remains solid.

For constructive discussion.

thanks

DV