interim results are out, page-17

stonemasonn... i wish i could share yr unreserved bullishness but am not convinced by some of yr points.

RQL is not 'unique' and certainly doesn't 'operate a monopoly through its main dewatering subsidiary'. Since mining started many/most mines have conducted their own dewatering. Many still do, and i foresee RQL's main hope of new business in new mines coming into production. Yes, we have 70% of business via established clients and that is pretty solid. However, there are no guarantees.

My understanding is the business is not entirely 'inelastic'. I am overseas and wish i could ring company to confirm exact situation. This is my perception: Where the mine requires constant dewatering RQL's earnings are constant. Where we have pumps in place but they are used only when required... then earnings from that site vary. I have no inkling how much the variation is. Open-cut mines have massive variation depending on rainy season. UG mines have more consistent water issues.

I wish this business had high 'barriers to entry' but how strong are the barriers? Other contractors on minesite have a vast range of expertise and there is little to stop them bidding for the dewatering contract. We know this already as RQL management have stated they have many 'bids' in place and are awaiting outcome. If we were the only bidder the tender would have been decided.

We do have a 'competitive advantage' and the morass of state govt legislation is partly (largely?) responsible. RQL know-the-ropes and utilise this to gain the sale. But others are learning too.

DSA lost it's major (30%) contract last year to a contender. I'm guessing it was MIN. We cannot afford any complacancy.... and in hindsight losing that contrart will be a huge lesson for company. They had no inkling it was coming.

In summary, i have confidence in RQL management but every deal is contested-for these days and i'm unwilling to believe the road ahead will smooth. Nevertheless, we will win a decent percentage of tenders. I am wondering if margins won't decrease after the big wet of 2011 made pumping water very lucritive? Strong AUD helps re cost of imported pumps.

As you state: we can only express 'our own opinions'. I always look fwd to yr posts.