Ann: Sugarloaf Production Update , page-51

Plymouth,

Happy to make a sportsman bet.

EKA's 10 June presentation disclosed cash of A$1.85m. The problem with analysing the situation without seeing a detailed balance sheet is that you don't quite know what they have prepaid. I suppose a look through the quarterly reports would give some additional information. However, it is not a particularly rosy situation.

It's quite possible that EKA's price might be held back by concerns over another CR. If AUT makes it above the magic $, AUT might be able to buy EKA for 2:9 share issue, which I think many would feel to be fair enough.

However, I don't see the benefit of holding EKA instead of AUT in that case because we are then looking at an enhanced multiple of AUT to EKA.

The AUT Board did a good job of raising the capital in a difficult market. When I first invested in ADI, before the farmout, I couldn't see how AUT could service the acreage that it had accumulated. The situation now is entirely changed, in my opinion. The SPP is underwritten, so they'll get the additional cash provided that shareholders sanction it and I don't see any reason why it should not be approved. That will put AUT in a strong cash position able to progress with the project regardless of what happens in the general market for the rest of the year and probably some time beyond.

Indeed, the current uncertainty in the market might work to AUT's advantage - it might be able to secure the infill leases at a reasonable price.