Ann: Quarterly Activities Report, page-22

"but as yet unable to find one that meets their search for value and of course ROI expectations"

Berger - I consider this statement incorrect.

There's a project under their noses that is basically a risk free investment i.e. Koolan Island

All they have to do is undertake a share buy-back and they effectively increase future earnings by 15% p.a. without incurring any additional risk for the company. What better opportunity is there than that!

They would also pick up an immediate gain on cash and franking credits of at least 10% insofar as the stock is trading about 10% below cash.

If we assume that KI is worth $400 million or 36.5 cents per share (1090 million shares outstanding) then by buying back 15% of issued capital this would increase the value of KI to 43.2 cents. (927 million shares remaining) In second year  of a buyback the value of KI would increase to 51 cents. (787 million shares remaining)  In the third year of a buyback the value of KI would be worth 60 cents a share. (670 million shares remaining).

If use assume a buy back of 40 cents - 3 years worth of buybacks would only cost $168 million (1090 -670) *.4 still leaving the company with over $300 million in cash.

So in three years you can effectively buy back the KI project and increase the value of the project by 65% without incurring any risk.

Of course this assumes that share price wouldn't rise which of course it would - which begs the questions why the hell aren't the directors undertaking a share buyback. Don't they want the share price to rise which would strengthen their purchasing power in the event of any external acquisition.

As per the AICD website and the corporations act directors are required to act in the interest of all shareholders - the operative word here is ALL - not just the majority shareholder.

As a general guide to fulfilling these duties, reference should be made to the words of Professor Baxt in Duties and Responsibilities of Directors and Officers 21e (2016) at p 72: "During times of difficulty and conflict, the yardstick by which a director may safely judge their own actions is this: Taking account of all the circumstances, is what I propose to do "in my honest belief" in the best interests of all the shareholders (present and future) of the particular company of which I am a director?

So the question remains why does the board allow the share price to trade below cash backing knowing that this limits its ability to use script in the event of an acquisition, and forgoes an excellent opportunity to increase value for minority shareholders without incurring any risk.

AISC should investigate this behavior in my view.

GLTA/IMHO