Ann: Significant Upgrade to K2 DFS, page-13

About 3-years ago, ORD had the makings of a billion dollar company. Mismanagement, 3-years forward, has landed ORD SHs in the very state that they now find themselves in. DAU SHs have been tortured in a similar way.

I dont have a DAU opinion in isolation, but what I would say it that a tie-up (T/O or merger) makes sense. Its a real shame that DAU did not accept the T/O. In fact I would say it is a disgrace. DAU has no assets apart from the Plutonic project. A DAU HQ is not required. Much more efficent to merge and get rid of two concurrent boards. ORD is well connected, especially with Chinese investors and has peripheral assets that can be used to source capital. For example the Laos asset is still on its books with 226Mt of bauxite in the M&I category. If the option is exercised on the earn-in $5M will come into ORDs coffers. It has already attracted the upfront option payment. Same deal with Suplejack and ABM resources. Additionally it still has copper flats. DAU? Nothing.

ORD has been able to tap capital markets and advance the Plutonic project since the earn-in (something that would not otherwise have been achieved under DAU - precisely why DAU inked the deal with ORD). 100% ownership would have given ORD the scale and hence economics to sensibly develop Plutonic. At the moment it is advancing the project but the earn-in conditions are too expensive, so it is preferable to advance via T/O. The bottom-line is that ORD gets full control plus all of DAU's assets. I noted that the new DAU BOD are on the scout for other prospective projects, but the question is why? SHs dont want anymore pain through mismanagement and dilution; sell to ORD and let the company advance the asset, as the plan is to return any earnings to SHs. There are top10 ORD SHs on HC (kori one of them). These shareholders want return and have the muscle to 'persuade'. Much safer hands as a ORD shareholder as opposed to DAU, despite past failings.