Forecasted Zinc Price

1,250
1
2009

1,650
2
2010

2,200
3
2011

2,200
4
2012

Net Operating CF(10.06)

Capex
(4.45)
Cash Flow
(14.51)
Debt Repayment (5.88)
Finance Cost
(1.07)
Equity Free CF USD
(21.46)
Equity Free CF AU
(32.72)
$MN

11.94
(3.11)
8.83
(2.12)
(0.76)
5.95
9.07

42.19
(5.90)
36.29
(0.68)
35.61
54.30

42.19
(5.90)
36.29
(0.68)
35.61
54.30

7.78
7.50
7.23
6.98
6.74

43.11
40.80
38.65
36.65
34.79

39.91
37.09
34.51
32.15
29.99

Discount
8%
10%
12%
14%
16%

(30.30)
(29.75)
(29.22)
(28.71)
(28.21)

Investment in Exploration
(PV Ignored)

2,000
5
2013

2,000
6
2014

2,000
7
2015

2,000
8
2016

38.35
(5.90)
32.45
(0.68)
31.77
48.45

34.87
(5.90)
28.97
(0.68)
28.29
43.14

31.70
(5.90)
25.80
(0.68)
25.12
38.30

28.82
(5.90)
22.92
(9.05)
(0.68)
13.19
20.11

32.98
30.09
27.49
25.16
23.07

27.18
24.35
21.85
19.65
17.70

22.35
19.66
17.33
15.31
13.55

10.86
9.38
8.12
7.05
6.13

DCF
153.87
139.11
125.97
114.25
103.77
15.00

Current Valuation of equity

Number of shares outstanding
Share Price
Market Value

196.88 Million
0.14 AU $
27.56 AU $ MN

Valuation based on average stock price

Six months avg stock price
One year avg stock price
Market Value at six month average
Market Value at one year average

0.41 AU $
0.94 AU $
81.38 AU $ MN
185.73 AU $ MN

Valuation offered by CBH (Oct' 08)

Swap Ratio - 4.2:1
Share price of CBH (Sep'08)
No of shares CBH will offer
Market Value of offer
Net Book Value (Jun 2008)

0.07 AU $
826.91 Million
57.88 AU $ MN
148.00 AU $ MN

Date
Ownership
Amount
Reserve
Ore (MT)
Zinc
Lead
Silver
Zinc (MT)
Lead (MT)

Net Asset
Valuation

Jun'08

Dec'07

Broken Hill

Flinders Mount Oxide

55%
RMB 341mn

19.7
3.31%
1.05%

17.3
13.10%
7.60%

0.65207
0.20685
0.85892

2.2663
1.3148
3.5811

RMB 620mn AU $138mn

RMB 620mn AU $576mn
620
575.7
96.048086
343.957801

10.02 0.210933
6.10%
4.50%

0.61122
0.4509
1.06212

AU $24mn

Current Valuation

Mount Oxide

4.4821
6.8349

57.8835 27.56357

Current Valuation

0.22311 1.524933
8
12.19946

859
125.6785
191.6471

27.56357

-21.46
5.94
35.61

148

1
1
2
3
4
5
6
7

Grading on Chinese mines were low as compared to Australian mines

Prices of base metals delined greatly in 2008

Mining companies suffered significant operating losses and experienced extreme difficulty in obtaining finance.
2008 - Global Prodn of Zinc - 11.9MT and consumption 11.8MT
55% of domestic zinc was used in hot-dip galvanizing. More galvanizing units expected to be put into operations, hence Zinc d
Lead-acid batteries (the main lead consuming industry) had grown 20% and 35% domestically and exports
Supply side constraints bcoz of lack of high quality mines andlimited smeltring capacity

operations, hence Zinc demand expected to grow.