Ann: Quarterly Activities Report September 2011 , page-17

re: Ann: Quarterly Activities Report Septembe... In a game where infrastructurec is everything, sorting out the port situation will be absolutely crucial for these companies. Living on the EP now, i can say there's alot of opposition to some of the proposed planning, however big business tends to win in a majority of instances, doesn't it.

The main risks i see for the majority of EP io coys is the timeframe to production. Lets assume the port situation is resolved and LML is producing towards the end of this decade. Pricing the generally agreed upon softening in io prices into any cash flow model is going to mean that you either need to have an enormous low grade magnetite mine that can very readily undergo treatment - ala Iron Road - or have a nice shallow, high grade DSO resource, ala perhaps WPG before they sold Peculiar Knob. Anything less will be uneconomical or too low of a IRR imho.

Don't get me wrong here people, i could see LML still running to 20c easily, maybe 30c. Just don't see them really doing much for quite a while, until they develop a much larger JORC. Raising capital in the current environment is likely to be extremely dillutive.

Lastly, can anyone update the current state of play with the hydrology issues for Gum Flat? Last time i took a decent study of the project, it looked like a major issue that could potentially hinder the entire feasability of the project. Any updates.

One thing i liked about LML was the ability to call up the office and speak straight away with John about the project. Not so common.

One last bow i think the coy has to draw are their other mineral tenements, such as the graphite and uranium. Again, raising capital to explore will be an issue; but they do have some interesting packages to explore.

Best of luck to all holders (especially Saga, who i know has been holding forever) and hoping things turn around in 2012 for you all.