Ann: Notice of Annual General Meeting/Proxy Form , page-2

re: Ann: Notice of Annual General Meeting/Pro... Annual General Meeting Resolution 4, if passed, will give the company the ability to issue a maximum of 12,294,000 further shares progressively over the next three months. The company anticipates that increased exploration activities will require additional expenditure to fully complete the anticipated exploration and the funds raised will be used for that purpose.

Whilst the amount of funds to be raised pursuant to this resolution are not yet ascertainable, the intention is to apply all of such funds, less any cost of fund raising, to further advance the exploration program at the company's Wilcherry Hill gold, lead and zinc targets.

This allocation will obviously be placed with professional and sophisticated investors of a broking house and come at a cost both to the company in dollar terms and to existing shareholders in terms of dilution.

According to the recent Wilcherry Hill Project Feasibility Update released by Ironclad Mining the joint venture project team have adhered to two main principles during the feasibility process including earliest and low capital start up.

Since a large proportion of the mining, processing, haulage and port capital costs are to be amortised within operating contracts, an exceptionally low capital start up is anticipated according to that company. This is likely to be within the range of $12-19M. The main capital items which Ironclad intends to solely fund relates to minor modifications to road transport routes, dry magnetic additions to the contracted crushing and screening plant, borefield development (dust suppression) and additional camp and site office facilities. Site work is currently underway including the upgrading of access roads and the establishment of preliminary infrastructure.

Importantly, in addition to the above capital requirement, a further $6-9M of working capital is required during the start up period making the Stage 1 project requirement $18-28M.

Ironclad believes that the modest start up capital requirements can be sourced through a simple balance of debt and equity funding and is discussing these matters with a range of finance houses, institutions and brokers both in Australia and overseas.

What will be the blend of this debt and equity funding?

How will Ironclad finance the equity funding as it had only $4.605M on hand at the end of the September quarter?

Will it also seek to raise capital by issuing further shares via an allocation to professional and sophisticated investors or by a further renounceable rights issue?

If by a renounceable rights issue, will Trafford Resources also need to conduct a renounceable rights issue in the near future to maintain its present shareholding in Ironclad?

I don't necessarily believe that the company should overlook its existing shareholders and seek funds from professional and sophisticated investors but, unlike sushi1, I understand why the directors may choose this unpopular option. Let's face it, company directors in small companies with tight share registries usually have a fairly large holding and put a significant part of their personal wealth on the line as a show of confidence to other shareholders about the company's future prospects.

Unfortunately, as the company expands and seeks further capital, raising funds via entitlement issues places these same directors in a difficult position. They are usually wealthy individuals but aren't in the Bill Gates league with unlimited funds and they find it financially difficult to take up their full entitlements. If they don't take up their entitlements, it's seen as a show of no confidence by other shareholders and they run the risk of driving down their own share price. They really can't go out and declare that they just can't afford it as they are probably, like most of us, just too proud to publicly make this sort of declaration.

So sushi1, forget the conspiracy theories and look at from the human side. We also pay a price as we have to travel the same path but, bear in mind, their shareholdings are being diluted as well and that comes at a much higher cost to them than it does to us in monetary terms.

Stagman