png deal, page-14

Swarth: "If there was any reason to doubt that the contract will be signed on time or even delayed there should have been a market sensative announcement."

I wouldn't expect the board to make an announcement if they are just somewhat concerned - they'd have to be fairly sure there is a very good reason to doubt that the contract would be honoured before making a "dubious" statement to the market, otherwise it could be construed as "misleading the market". That being said, there were I think a few eyebrows raised when the PNG order came through and there are some who would not be very surprised if it fell through.

Apart from the usual flurry of activity on the day of the announcement and for a few days after, I don't think it's made much of a difference to the share price. All the large investors would already be discounting these particular chickens as they are not yet hatched!

While it would be a bit of a blow to the credibility of the company if the deal didn't go through and perhaps somewhat financially embarrasing as presumably they are now working towards fulfilling the contract, the long term position for the company is hardly changed. It depends on US and possibly Australian defence force acceptance of the technology and commercialisation of at least one of the weapons. There seems to be a fairly positive sentiment that this will happen, even if it takes a while.

While the price might go down a bit on an announcement of the contract not going ahead, I wouldn't expect a debacle. The price of MST has been well supported at .008 for a long time now in the face of some heavy selling both before and after the PNG announcement. There's no great reason why that would change much. If it went down to .006/.007 I expect there'd be a lot of buyers picking them up and probably not that many of us "true believers" who'd sell down at that - we didn't before in much worse circumstances, so why would we now?