sdl valuation, page-9

Hi (bigstar)

With the spot price being a lot more then US$63.12.

A review every 3 months likely to be adopted on iron ore pricing.

With the Chinese likely to be the main funding agent who usually set up funding at a very low interest rate of 1 to 2% and over a 20 to 25 year period.

Cameroon Government share of cost's likely to be a fair bit more then $50 million at present and higher by the time they decide to take up the extra share of SDL.

Sundance have been looking into setting up DR,Pellet Feed,Concentrate, and Steel Mill Plants.

Will need to build an extra 45kls of rail line from Nabeba.

DMC has a rail line which is narrow gauge very close by and goes to Pointe Noire Port.

Meridoinal being drilled and showing good prospects for high grade DSO.
DSO from the over 20kl of targets going to The Congo border and into The Congo.
Several other targets around Nabeba that are looking to have high grade DSO and Itabirite.

Other tenements that have been applied for next to African Aura and at Les Mamalles that could be brought on line quick if they get them.

Other Projects like Avima,Badondo,Belinga and African Aura who would have to help pay for a share of the rail line or pay SDL to use the rail line and port infrastructure.
That would bring down the expences for SDL.

I appreciate all the work you have put in to your presentation.
The only problem is,there are too many variations of what may happen and what could happen to the end iron ore pricing and infrastructure needs,costs,what SDL will end up owning or having an interest in ownership etc.

The way I see it we need to wait to find out the final plans for financing,final projected needs of infrastructure to be built,final agreements with other projects to see what they will pay to use SDL's infrastructure,total DSO resource nearer to the end of 2010 that has been given a JORC result.These things will all make a difference to the figures.

The funding partners could ask for the Itabirite out-side the DSO cap to be mined at the same stage as the DSO at Mbarga.

There will be at least 3 pits being mined.
Mbarga,Mbarga South and Metzimevin.
If all started at the same time Mbarga South and Metzimevin will have their DSO caps down to Itabirite before Mbarga does.
If Metzimevin cap is mined at the same time and at the same rate,it will not be 7 years like Mbarga to get down to the Itabirite.Metzimevin at this stage is said to have around 36 million tonnes of DSO.One years supply at 35Mt per year of production of DSO.Metzimevin Itabirite foot print looks to be bigger then at Mbarga.

Regards
Westcott.