sick as a parrot......, page-12

Dear Hiten Pindoria

US Steel has probably spent well over US$20M in today?s $ on the project. Richmond?s assessment of the project is not solely based on this work. The reason the Company undertook the drilling and metallurgical test work was to verify and validate this data to determine the best strategies for the early development of the project. The Company has also, as you would expect, approached service providers to get indicative quotes for various aspects of a potential operation. The culmination of all this data gathering exercise was to assess whether it was worth going to the next stage, which is a feasibility study. As I?ve mentioned in my previous email, the feasibility study consists of numerous parts that are going simultaneously and require a concerted coordination effort.

In terms of more drilling, as I mentioned in my last email, the Company has no plans at the present time to undertake more exploration drilling at Buena Vista. For an iron ore deposit, the West deposit has been diamond drilled on 200 foot x 200 foot spaced centres i.e. approx 60m x60m. In Australian iron ore operations this would generally be the smallest spacing that drilling would go down to for a feasibility study. The West deposit at Buena Vista currently has close to 100 drill holes into it. The focus is on advancing work on the potential for Buena Vista to become a producing asset for the Company, thereby presenting to Richmond the opportunity of early producer status and significant cash flow. Once the Company has a cash generating asset then it is much easier to fund further drilling and look for the next deposit to mine. There are already 4 others identified at the project by US Steel that require follow up.

Yours sincerely


Max Nind

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Dear Hiten Pindoria

Fast tracking the project can be seen of in many ways. The US Steel data is one such example. Richmond has used the US Steel data to form the cornerstone of the assessment. It is estimated that for Richmond to replicate this study an expenditure of $US15-$20 million and +3 years of exploration would have been otherwise required. As part of the project assessment, Richmond was required by the ASX to verify and validate the US Steel study work before the Company could use it as part of the assessment. This was required because the work was performed 40-50 years ago and it pre-dates all the relevant regulations that resource companies must conform with today. Also, because assumptions, prices and costs have changed over that same period, Richmond needed to gather fresh information for the assessment to satisfy that Buena Vista was a potentially viable project.

The decision to invest potentially up to US$8M in cash to buy the project is not a decision that is taken lightly by the Board of Richmond. They have a fiduciary duty to all shareholders of the Company to ensure that such a decision is justifiable. Regardless of this, the $ is better in the Company?s bank account at the present time, as there is no advantage in the Company paying for the project early.

We disagree about your comment on lack of communication. The Company has made many announcements to the market to keep the market fully informed since the acquisition of the project and we believe we have done an excellent job.

Yours sincerely


Max Nind