re rating c24 by raymond james, page-3

Hi Whitelight,

Yes well thanks despite the fall today. I think we must be getting closer to some sort of resolution with regard to the DRC mining review. Bill in the capital for a week and Mike in talks with Gecamines and others, at least something appears to be happening from the Govts end. As I posted yesterday, Craig Munro's comment about working within the existing contracts framework did give an indication where Anvil and First Quantum stand.(I presume from previous comments by First Quantum)

But we are working on Congo time so I still think we could be another couple of months away.

I was like many of you, very disappointed with the results. Not so much the new cost for Kinsevere Stage II, as I've been reading about several other miners having a nightmare with budgets blowing out by 100% or more. So it didn't surprise me too much that we have around 20% inflationary increase.

The rest of the cost expansion was due to a more detailed and increased infrastructure work and a redesign of the operation of the contractors. I agree, it also does aid in the argument that the IRR will not be too excessive in govt. negotiations, and that the govt. cannot demand what they are asking because of the difficulities in building infrastructure in the DRC.

The surprise was the problems with the bottom-up mining approach at Dikulushi. 4-6 months to fix, before its back to full production. Kulu wasn't much of a surprise as it's been well telegraphed they've been having ongoing problems there. A small 15K SXEW plant will solve the problems, and by the sounds of it the decison has already been taken.

The EAF plants being ramped up at Kinsevere is some good news. There is a lot of exploration and resource upgrades still to be released. So hopefully we have heard all of the bad news.

If you wouldn't mind sending me a copy of the new Haywoods report, it would be appreciated. Thanks Whitelight.

All the best

KKR

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