Ann: R&D Tax Incentive Refund, page-33

I am sure that's what they are claiming.

The work that they have reported doesn't fulfil that criteria although I am sure the Company would argue it does. I could provide the details as why their activities don't qualify but it becomes a technical argument and it is also subjective. I am trying to avoid that.

Anyway, that becomes secondary as the first test the ATO will apply is what is its purpose of the work. Given that in every Company report the stated purpose of the Company;s work over those periods has been mineral exploration it will be hard for them to argue otherwise. The ATO will ask them what was the purpose of the work, what are they going to say? for two years we have been drilling holes in the desert, not for the purpose of mineral exploration.

The ATO will then ask, then why are you reporting that you are carrying out mineral exploration to your shareholders and claiming it as R & D.

Remember they are not claiming some of their expenditure but it looks like to me they are claiming the majority of their expenditure as R & D.

Like I said I am just pointing a potential issue. I would be happy to be wrong