underperformance, page-10

I think what is holding the sp back is the perceived risk that the mine life is less than 10 years.

Once they release a resource upgrade and are able to incorporate that into the mine plan, extending current life of reserves then we should start to see some movement.

The company has done well in building up a pipeline of projects. There are a number of JV that are currently been explored and there is C for the future.

If they are able to get C up and running at a decent cash cost with significant (15 years or greater) mine life then we would really see OZL become derisked as it moves from a one trick pony to a company with two producing assets.

I work in exploration and I can say that despite a lack of results on the exploration front, this does not mean that the team is not working exceptionally hard to come up with another discovery.

The planned budget for 2011 indicates that OZL recognise they hold some very good ground and are willing to put some exploration dollars into it and thoroughly explore the region. $70 million for the region is a big budget and will allow them to make a concerted effort to find another deposit.

Too often we see companies that hold good ground to only drip feed money into a project for years and years. In my opinion it is better to get in, get a result as soon as possible and make a decision on keeping ground or dropping it and moving on.

This way you can make the most of market cycles and have projects at more advanced stages ready to capitalise on economic conditions. Nothing worse than a company holding a good deposit and having only done a half assed job on defining the resource and then miss out on a boom period due to lack of investment in the early years.