wmr takeover, page-11

Regarding takeovers - the first thing that is cut is exploration. Most exploration is medium to long-term and finance people are only looking short term - that is how to repay the few billion dollar loan that BHP will need to fund the takeover of WMR.

1. They will sell off various assets that don't fit BHP's strategic thinking (and so raise cash to repay the loan).
2. They will cut anything that does not produce cash flow - administration, management, accounting, exploration.

I have seen it before with BHP and Utah, RIO and North. It wasn't a happy experience.

Only if BHP can see some short-term advantage or FCN has a commitment from WMR will exploration continue at the pace it is currently.

The issue is - a mine that will produce reasonable returns for a company WMR's size may not produce something significant in the way of cash flow for a company BHP's size.

It may be an opportunity for fcn to buy out WMR's share and perhaps farm it out to someone else. There could also be a clause in the contract regarding takeovers.

G

I don't hold