What the .........!, page-23

Extract from Argonaut Report P20

"With current production rate of 8 TJ/d, we forecast that the Alcoa pre-payment gas commitment will be extinguished in September/October 2015. From then, gas sales plus condensate sales are expected to produce cash revenue of approx. $24m per annum at assuming a condensate price of $55 USD/bbl, gas price of A$5.00/GJ to Alcoa and A$7.00/GJ uncontracted; and exchange rate of $1 AUD = $0.84 USD."

The 2nd Tranche of 10,000tjs will be a fixed contracted price (about 3.5 years). The price is a big secret - may be a hedged price over this period,could be fixed and adjusted for inflation, could have ...? My opinion is that $5,000/tj may be a bit light on. Anything produced over the contracted requirement can be sold on market.

Selling prepaid to Alcoa to repay the ERM loan would land you in the same position as we have been in for the duration of Tranche 1. I would strongly believe that repayment will come out of the sale of the gas plant (North Red Gully willing) and any top up debt or equity. EGO will retain all reserves and the gas plant in the farmout process so they can maintain cash self-sufficiency.

My Opinion Only