response to reply from scott douglas exec dir

Kakoii, when it comes to CDS you seem to be like the pope.
- In direct contact with the big fella
- Your word on the company is infallible
- You're always defending the company.

So could you post up Scott's responses for this post?

My responses are prefixed with ">". Scott's are enclosed in "".

1. Tricom involved - does that not ring any alarm bells???
Holders would be well advised to DYOR on these guys. In the investment banking world they are used toilet paper. If these guys are all that CDS can get, is CDS what goes on the toilet paper???

"Tricom is not involved in CDS, and to my knowledge never have been. Trident Capital is one of the leading corporate advisory firms in Perth."

> Pardon me, I had a spontaneous evacuation when I read the announcement which did more than jolt my colon.

2. What exactly are Tricom facilitating? - The issue for Tassie and SA?
- The issue of director shares?
- The proposed placement?
See point re: toilet paper.

"N/A"

3. Directors Entitled more than holders???
- Sure, the directors have worked hard but so have holders in order to finance their shares. I think the deal being put to shareholders doesn't respect this.

"See point 5"
> See response to point 5.

4. Directors Entitled?
- Since the Nov 07 round, we were told RSBA March, then April. There aint many days in April as yet. Has a delay been communicated to the market? Where is the activity update?

"I believe we have been completely clear and transparent in our reporting to the market. As I stated at the last shareholder meeting I am reluctant to put dates on processes out of our direct control as they tend to be cast in stone by the wider market. To this effect I stated the April timing of the expected response from SARB was directed to us by our attorneys handling the matter in SA and in my view it would more than likely be longer."

> Several points:
> - The AMP presentation listed several deliverables for Q1. We're in Q2 and we don't have an update on any of them. Any update is better than no update.
> - See point 5 re: disclosing the drill data acquired as part of the Tassie and SA acquisitions.



5. Director Entitlement Option Strike price
- How can we vote on a strike price when we have no info at all on the historic resource data?

"The options as stated in the NOM are in lieu of a reduced salary (50%) based on current market rates incentivisation and performance to date."

> Market rate incentivisation for companies at which stage of development? I'm not aware of companies where the directors write options prior to price sensitive announcements. Also as has been mentioned, performance should be measured since the last issue of incentive options. During this time the company has failed to deliver on promises.

- Why should we vote a strike price when the directors are aware of the resource potential and the holders are not?
"The company is not aware of any material information that is not currently available to the market."
> I disagree. If 4 holes have been used to calculate a resource that has been reported to the market and the company has a further 22 holes - the 22 holes should be reported to the market. Whilst I think that companies should not announce drill results in isolation, given that these 26 holes have been given to the people in SA and currently no further work plan is scheduled - essentially the existing data for tenements (SA, Tassie) which the company is asking holders to approve represent a completed drill program.

6. Share placement - To who?
- Who are the shares being placed to? See point 2 in relation to cutting some fat to holders, as opposed to just directors and their mates.

"See point 7"

> See response to point 7.

7. Share placement - Why dilute holders at a low price?
- Scott has said they have enough cash at bank at current cash burn to continue until October and that a BFS for SA should be for Q2 08. When will the placement occur? If they have enough cash at bank to continue to October, it makes sense to issue 50 million shares when the RSBA approval is signed off, at least preliminary BFS is done for Tassie and SA are signed off. Giving 50 million to their mates and Tricom is selling out holders.

"We are only asking for prior approval to raise funds at a later date when and at what price management deem fiscally responsible. Obviously it would be at the highest price possible and only to those that can assist in supporting and taking the company to the next level, which is beneficial in the bigger picture to all shareholders. Reflecting on the last 6mths I think we have managed this well."

> - The current shareholders are the people that have (along with the directors) played a major part in taking the share price from where it was 6 months ago to where it is now. Therefore, I think the statement "only to those that can assist in supporting and taking the company to the next level" is contentious. The directors shouldn't be making that decision. The company should be issuing 50 million renouncable rights to holders attaching to every x shares held. As an example, at a strike of 22c and 50 million issued, 11 million in cash is raised. Having the rights renounceable and underwritten means that those holders "who cannot take the company further" can sell their rights to those who can. i.e. The market should make the determination.

Further, any issue to directors should be at the same price as an issue to shareholders in order to ensure that directors are rewarded when holders and the company is in the money.


8. Directors disclosing?
- They aren't disclosing progress to the market in relation the mines and I think there is enough drill data to infer an resource estimate. Therefore why should holders vote on something that they have 0 information on, that dilutes their holding?

"The announcement “SHAREHOLDER UPDATE – COAL ACQUITIONS” dated 10TH MARCH 2008 clearly states “The data includes both hole logs and analysis. This data has been captured and is presently being modeled” this is currently the status. As previously stated it is being completed by our consultants in SA. When it is completed and released to us it will be made available to the market."

> See point 5