Ann: Chinese Mining Fund Signs MoU for Stage 1 DS, page-24

re: Ann: Chinese Mining Fund Signs MoU for St... As I see it this announcement is all about risk transfer and relationship building. IFE realise unrisked $35 million investment from asian partner in the DSO project and still get exposure to 30% of the production - for which they have put in place a non binding MOU. There is no certainty of what future prices will be, remember production is only goining to ramp up from the end of 2010, and if there was a price reduction after this time then the margins on the project could get crunched.

I think on balance it is not a super deal, nor is it a bad one. I think it is also important as a strategic move to have a partner that could potentially be a major customer of larger future project stages. Sometimes you have to give a little early one to gain a windfall later. Good move.