dfs, page-7

Hi Guys,

I was offered shares as part of the capital raising process but declined. I thought I'd wait till after it was finalised and made public before I commented.

I declined because:

(1) Raising was via IFE and not TRF
(2) 72% equity dilution for IFE - massive!
(2) 22% discount to last SP for IFE - large!
(3) BFS not available to prior to decision to invest
(4) Port contracts yet to be finalised
(5) Shipping of Ore now 'hopefully' Dec-11
(6) A further dilution of $6-8m closer to shipping
(7) No debt funding = reluctance of insto's to lend to project and less equity upside for shareholders (through more dilution)
(8) Environmental approvals still to be obtained

During the day of the 14th Dec intersuise tried contacting me several times before they finally got me (out and about without cell phone) - not a good sign that placement was going well. Thus, IMO, the Placement providers may have a reasonable amount of shares that they will want to release on market.

IMO, the IFE share price will drift towards 75c as existing holders sell above this price to exercise their right.

Upside in project is now diluted 72% - thus, re-run the EPS numbers.

Still uncertainty surrounding logistics, environmental approvals and first shipment dates.

TRF will need to raise $11.3m to fully participate in renounceable rights issue. They will not do this. IMO this is why the rights issue is renounceable and not non-renounceable. ie TRF will sell its rights.

TRF will thus be diluted in IFE project.

How the market will interpret this remains to be seen, and hopefully it will be smooth sailing from here for shareholders.

However, the above is why I did not participate and will stay on the sidelines in the TRF/ IFE project for the foreseeable future.

Good luck however,

Cheers
John