the future, page-25

I think it is likely that Xstrata will retain the Jubilee holding in Falcon and that once the takeover is finalised, will seek to impose its representatives on the Falcon board. I cannot see that Mr Hamanis will remain on the board as he holds the Chairman's position as a gift of the share holding of Jubilee. Yes he holds 1 million Falcon shares personally but that would be outgunned by the Jubilee/Xstrata holding.

Both the Collurabbie and Saxby are potentially very interesting and Xstrata will not want to see them lost if it sees any potential, at least in the short term. On that basis it will retain its Falcon holdings, in my view, at least in the short term.

Anglo American has a drilling programme set down to commence at Saxby at the end of the dry (around March I guess) with up to $7 million to play with. If that shows promise look out for a quick takeover run of Falcon from Xstrata.

However Collurabbie is still, potentially, the jewel in the crown. One has to wonder why BHPB has not been more active with this one. A properly targetted drilling programme there is likely to see some very positive results but that might need to wait until BHPB and Falcon sort something out in relation to management of the project. Remember BHPB has carriage of the project but surely it cannot leave this valuable area untested.

One has to imagine that BHPB must be smarting over the Xstrata grab for Jubilee and wonder how that will affect their attitude to the joint venture with Falcon.