Mkt Cap $180M Gold Held $290M Value, page-14

For anyone reading those SMH articles and who has suspicions about a compulsory acquisition.

Last year in August, Chinese parties, Mr Zhendong Lui and Mr Xinqian Li and their associated companies lodged substantial holder notices that declared interests in both Tribune and Rand exceeding 10% of each company.

Conspiracy theories aside any compulsory acquisition would need to gain the approval of these gentlemen before having any chance of success.

For argument sake let's entertain a conspiracy notion. If any related party that currently controls TBR and RND was related to Mr Zhendong Lui or Mr Xinqian Li or any of their associated companies then Mr Zhendong Lui or Mr Xinqian Li  would have need to disclose any such relations in their substantial holder notices. No such disclosure was made therefore if any such relationship did exist those parties would be in breach of the corporations law and potentially (I'd need to check what the law says) may also enliven criminal provisions under the corporations law should those parties use their association to act in unison against the minority shareholders of the company. It would be extremely risky, reckless and illogical for the parties that control TBR and RND to enter into such a conspiracy.

So with the Chinese parties as major shareholders the minority shareholders have some form of protection against a situation whereby the controlling interests of TBR and RND were to elect to try and compulsory acquire the companies. Obviously the controlling parties and the Chinese interests could still try to negotiate a backdoor arrangement to facilitate the compulsory acquisition but that again would be illegal.

I don't know the law in this regard but one would imagine that any compulsory acquisition by the controlling related parties of the minority shareholders interests would need to reflect a fair value and if not a fair value at least a value greater than the liquidation value of each company. Although the minority shareholders in the companies are small some still have significant means and would likely exercise their rights in a court to achieve a legal settlement in a situation where a fair value wasn't offered in a compulsory acquisition

Some time ago I did a back of the envelope calculation and figured out that in 5 years from then the gold holdings alone of the combined companies would equate to over $7 per share for TBR. The metrics I used have already probably improved and should some of this speculation about where the gold price is going become real those metrics could double the dollar value of that estimate over this time IMO. I don't rely so much on speculation. As you would all know by now I plan to hold and stay the course.

The biggest risks to an investment in TBR in my opinion are as follows and they are in no particular order of importance. I can't ascribe a weighting to any of these risks but they are the risks as I see them.

1) At catastrophic event at their mines. Given that the companies trade below the value of their gold holdings the effect to the fiscal health of the companies would be bad but not catastrophic in its self as they are basically backed by gold no matter what.

2) a major devaluation event concerning the price of gold. The only event that I could possibly foresee that would cause the gold price to fluctuate so low that it becomes a risk to the company is the government seizure of gold, that is making the ownership or holding of "financial" gold illegal as was the case for a very very long time in the US last century.

3) Although the controlling related parties may find it difficult to compulsorily acquire the companies now that the Chinese own over 10% they may still be able to apply to the ASX to have the company delisted pursuant to provisions under the ASX rules which might allow this. In this case minority shareholders would have even more problems trying to access any value that is attached to their shares. Given that the companies have been listed and continuously in business since 1989 the chance of this occurring is probably small but not zero.

4) The sudden death of the managing director Mr Anton Billis. Given that Mr Billis has been an excellent steward of these companies since their inception and that he through directorships of most of the related parties controls the mining business (and has done so from the very beginning) his death would create a very complicated power vacuum that no one would easily no how to resolve. The company has become this successful and got this far based on Mr Billis' unique style of management and the judgements that he has made. Should the controlling structure survive his death and another managing director be installed in his place the new manager would never be able to show the business acumen and restraint that Mr Billis has shown in bring these companies to where they are now and would in all likelihood increase the risks to the company going forward.

If I'm allowed to be presumptuous for one minute I would like to give my honest opinion on the man. Mr Anton Billis. Mr Billis has worked tirelessly to build these companies every day since he floated them and can be found sitting in his chair in his office in South Perth without fail everyday unless he is flying to Africa were he has also worked very hard to try and grow these businesses. Over the years he has diligently reported the results of the companies to the stock exchange and the proof of his works can be found in those announcements. He knows the value of the companies and the market in their shares is free and parties can exchange those shares to one another according to their own judgements and desires. He continues to work for the shareholders and personally I think he will never stop working as long as he can still get himself to that office. What will be left in the end is the legacy of a man, who worked very hard, who didn't run with the pack, and who built a gold mining company from a few pegs sitting in the dirt 25km from Kalgoorlie. But the biggest legacy he will leave is a very very big store of gold in a vault (the biggest private ownership of gold ever amassed in the southern hemisphere outside of possibly the Inca empire, but that couldn't be regarded as private as it belonged to an entire civilisation). Don't ask anything from this man as he never asked anything from you.

Eshmun