spot sales, page-9

Hi Major

I would agree with you on the announcement format and its content, but having been a shareholder for 5+ years I have a lot of respect for the people who now run the company.

I raised this and I feel that the company was worried about the flow on results from shareholders if they did not release what they knew. In some ways I agree, shareholders in many companies complain a lot about a lack of disclosure and the company have always released what they can as soon as they can.

To be honest I really don't think they could have released much more than they did because they simply don't know, and that the next six months will be a month by month proposition.

They did state that effects on profits are unknown as at this stage they do not know what price the spot market will be at when and if they do sell into it. The spot market like all commodities at the market is all over the shop, but they were confident of being able to sell the ore into it.

They do believe that the present situation is only temporary and in 3-6 months time they will be back to normal.

In the meantime they are looking into cost saving measures as all businesses are and this may include delaying some development projects and cut backs which we all know what that will be.

The number of customers they did not state but I got the feeling that anything Chinese is very much on the nose and that they do not have a lot of trust in them and their motives. One could take this (my feelings) to be are the Chinese doing this to put pressure on the next round of IO price negotiations.

At the end of the day they stated the customers are obligated to take the ore and they will be holding them to this contract.

Really I feel that MGX have been honest in what they know and I am not surprised at the market reaction in the current market. However I believe that the price is very much under valued considering the ore grade they have and the growing ore body they keep on drilling up ( IO reserves are increasing despite mining). They have the infrastructure in place, funding in place and a healthy cash reserve. A lower $ helps out also and they have a very good management team in place. The price is cheap compared to some of the companies with reserves only and nothing else.

As to the Chinese I am surprised they have placed MGX in this situation due to the fact they wish to break the monoply of the big miners. Maybe they wished to break the share price of the company to mount a takeover but one would think t these prices they would struggle to get the acceptances to be successful and I would hope our government would stop it if there was a feeling this was the case.

Anyway tough times everywhere, one can only hope that things improve soon for all our sanity and common sense must prevail.