please explain share buy back?, page-5

TT

I am not sure what your motives are with this question but I would have thought that it was very obvious why they are buying back shares. Management are of the belief that the share price is undervalued and therefore buy CDU shares at today's prices and cancel them. Assuming management are correct in their beliefs then when the share price rises it will rise even further because there are less shares on issue. In this case Id predict that management would have made a decision that for example CDU financing, mining licence and DFS will come out positive which will see the share price significantly higher. If their predictions are correct it adds to shareholder wealth if there are say 10 million less shares on issue.

People could rightfully argue that the share price is significantly lower than pre-JORC where the buy back was implemented. A fair comment however we have not since issued shares below that pre-JORC level yet so if were to rise back above it this would merely be an exceptional time to implement the buy back.

In regards to what other companies do share buy backs, there are way too many to mention so just do a google search. The share buy back strategy above is huge in the USA and the repurchased shares are referred to as on "treasury account". In the USA companies accumulate their own stock at lower prices and sell them into the market (or re-issue the stock) at higher prices. They are virtually speculating on their share price.

I hope this satisfies your query as if you are confident in management this management buy back is not unusual at all.

I am the Iceman!