0 1 2 3 4 5

Cash flow @5% 100 -5 -5 -5 -5 -105

After tax 100 (3.25) (3.25) (3.25) (3.25) (103.25)
tax rate 35%
Market rate 13%
After tax rate 8.45%
PV of interest and repay (79.48)
Subsidy 20.52

Equivalent loan 79.48 82.95 86.71 90.78 95.21

Interest @13% 10.33 10.78 11.27 11.80 12.38
tax shield @ 35% (3.62) (3.77) (3.95) (4.13) (4.33)
payment (3.25) (3.25) (3.25) (3.25) (103.25)
balance 82.95 86.71 90.78 95.21 0.00

Interest difference 8 8 8 8 8
after tax 5.20 5.20 5.20 5.20 5.20
Present value @ 8.45% 20.52

0 1 2 3 4 5
Cash flow 100 -6 -6 -6 -6 -106
After tax 100 -3.6 -3.6 -3.6 -3.6 -103.6

After tax rate 3.00%

PV of interest and repay (102.75)
NPV (2.75)

Equivalent loan 102.75 107.83 113.34 119.32 125.80

Interest @13% 13.36 14.02 14.73 15.51 16.35
tax shield@ 35% 4.68 4.91 5.16 5.43 5.72
after tax interest 8.68 9.11 9.58 10.08 10.63
payment -3.60 -3.60 -3.60 -3.60 -103.60
balance 107.83 113.34 119.32 125.80 32.83
 1 1 1 1 1
2.74782431 0.60 0.60 0.60 0.60 0.60
`
Exhibit 3 Calculations of the Cash Flows Associated with the Firstburg Investment Opportunity 1973-1985 ($ millions)

Line 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 Total
15 Total cash return ### 25.4 25.4 24.6 24.6 24.6 24.6 24.6 23.8 23.8 23.8 23.8 28.0 322.4
free cash flows -7.5 -18.9 -42.5 -51.1 ### 25.4 25.4 24.6 24.6 24.6 24.6 24.6 23.8 23.8 23.8 23.8 28.0
NPV 1.71

15.00%
Exhibit 5 Proposed Capital Takedown Plan and Contractual Loan Principal Repayment Schedule 1969–1982 ($ millions)

Line 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1978 1980 1981 1982 Total

Capital Takedown Schedule

1 Senior debt—Insurance companies - 6.7 17.1 16.2 40.0

2 Senior debt—U.S. banks - 3.1 7.6 7.3 18.0
3 Senior debt—German bank - 2.4 8.2 11.4 22.0
4 Junior debt—Japanese ore buyers - 6.3 5.6 8.1 20.0
5 Equity—Southport Minerals, Inc. 7.5 0.4 4.0 8.1 20.0

6 Total capital 7.5 18.9 42.5 51.1 120.0

Total debt 18.5 38.5 43.0

Total equity 7.5 0.4 4.0 8.1

Exhibit 7 Calculation of Cash Flow (dividends) to Southport Minerals from Its Southport Indonesia Subsidiary, 1969–1985 ($ millions)

Line 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 Total

1 Earnings before interest and taxesa 27.5 27.5 27.5 26.2 26.2 26.2 26.2 26.2 24.9 24.9 24.9 24.9 24.7 337.8
2 Interest 8.6 7.2 6.4 5.3 4.0 2.3 0.6 34.4
3 Pre-tax profits ### 20.3 21.1 20.9 22.2 23.9 25.6 26.2 24.9 24.9 24.9 24.9 24.7 303.4
4 Taxes @ 40% 7.6 8.1 8.4 8.4 8.8 9.5 10.2 10.5 9.9 9.9 9.9 9.9 9.9 121.0
5 Profit after taxes 11.3 12.2 12.7 12.5 13.4 14.4 15.4 15.7 15.0 15.0 15.0 15.0 14.8 182.4
6 Depreciation and amortization 8.9 8.9 8.9 8.9 8.9 8.9 8.9 8.9 8.9 8.9 8.9 8.9 8.7 115.5
7 Cash flow from operations ### 21.1 21.6 21.4 22.3 23.3 24.3 24.6 23.9 23.9 23.9 23.9 23.5 297.9
8 Working capital changesb (5.5) 5.5 4.5 4.5
Cash flow for debt repayment and
9 dividends 20.2 15.6 21.6 21.4 22.3 23.3 24.3 30.1 23.9 23.9 23.9 23.9 28.0 302.4
10 Contractually required debt repayment 0.0 7.9 5.6 5.5 10.4 9.7 5.0 0.0 0.0 0.0 0.0 0.0 0.0 44.1
11 Debt prepayments requiredc 20.2 3.8 8.0 7.9 5.9 6.8 3.3 0.0 0.0 0.0 0.0 0.0 0.0 55.9
12 Cash available for dividend paymentsc 3.9 8.0 8.0 6.0 6.8 16.0 30.1 23.9 23.9 23.9 23.9 28.0 202.4
13 Cash investment (equity only) 7.5 0.4 4.0 8.1 20.0
Net equity cash flow (7.5) (0.4) (4.0) (8.1) 0.0 3.9 8.0 8.0 6.0 6.8 16.0 30.1 23.9 23.9 23.9 23.9 28.0

NPV 10.4
20% 27.2% IRR

Adjusted NPV (New)

Free Cash flows (7.5) (18.9) (42.5) (51.1) 25.4 19.9 25.4 24.6 24.6 24.6 24.6 30.1 23.8 23.8 23.8 23.8 28.0
NPV ###
20%

tax shield (@40% tax ;as risky as debt) 0 0 0 0 3.44 2.88 2.56 2.12 1.6 0.92 0.24 0 0 0 0 0 0
NPV 7.5
11.00%

Subsidy
After tax debt flows 0 18.50 38.50 43.00 (25.36) (16.02) (17.44) (16.58) (18.70) (17.88) (8.66) 0.00 0.00 0.00 0.00 0.00 0.00
NPV 7.1
6.60%

Total (3.8)