All participants (Growers) in the ABA schemes will receive an allocation of at least 1000 shares in Abalone Investment Ltd (AIL) upon application via the prospectus. As part of the recapitalisation process the Growers Group have been seeking the payment of outstanding cage and management fees for the 2005/6/7 projects and payments in advance for the appropriate fees for the 2008 project for which further shares in AIL will be allocated. We are advised that all these fees are (or will be) due and payable and pursued, whether or not the recapitalization is successful.  Growers may also wish to invest additional amounts which is permitted under the offer.

A prospectus has been provided electronically to all the addresses provided by the administrator and hard copies made available where required.  Unfortunately some of the address data was not complete until recently but nevertheless the response to date has been very encouraging.

For those wishing to view the Prospectus electronically please use the links on our Home Page. Hard copies are available on request.

Please note on the Home Page a recent letter sent to those growers we have not been able to communicate with until recently.

Please also note on the Home Page the advice from the Board that because of communication difficulties with some growers, the Directors have decided to extend the dates for payment of the amounts equivalent to outstanding fees, in order to ensure all growers are given due notice of their entitlement to shares.

UPDATE DECEMBER 18, 2009

The company has to this date received cage and management fees for all year
classes of approximately $4.3 million. To this add the further commitments that have been made which will take the total to over $5 million.  Further, with a number of growers to yet finalise or convey their position, it is anticipated that around $6 million will be received by the end of March 2010.

GROWERS AND INVESTORS REPORT – 1 FEBRUARY 2010.

On Friday January 29 the final DOCA payment of $1 million was made to the Administrators, McGrath Nicol, which means that the grower group through AIL now has control of all of the ABA Group companies.

Over the past three months significant efforts have been made to contact all growers in the 2005/6/7/8 MIS schemes in order to bring outstanding cage and management fees up to date and this has resulted in the receipt of over $5 million to date, a very good result and we thank all those who have so readily contributed.

Despite this effort however, approximately 47% of cage rental and management fees remain outstanding which means those growers cannot obtain shares and participate in the recapitalised group.  We therefore urge all growers who have not paid to do so as soon as possible as the company will be forced to legally seek to recover these commitments where arrangements have not been put in place with AIL.

We are expecting to receive the company records for all of the ABA group companies from the Administrators in the next week.  This will enable the company to issue tax invoices and receipts for monies received from growers for payment of outstanding cage rental and management fees.

In the meantime we are preparing to write to all growers who have contributed to AIL through payment of their outstanding fees equivalent amounts over the last 5 months in order to confirm receipt of those monies and confirmation of any other amounts they have committed to pay prior to 30 June 2010.  We will also include in that communication confirmation of the number of shares that investors will receive based upon the timing of the receipt of those monies. 

It as important that ALL growers who are participating in the recapitalisation ensure they send their application forms to the company as soon as possible, if they have not already done so,

There will be a separate communication to all growers from whom AIL has not received any communication or commitment to date in relation to the outstanding fees that are currently due and payable to the company, advising them of the arrangements that need to be put in place as a matter of urgency.

GROWERS AND INVESTORS REPORT – 9 APRIL 2010

The process of communicating with investors who have not responded to the earlier communication continues.  Every effort has been made by the company to ensure that Growers have the opportunity to participate in the recapitalisation and future business.

Pleasingly the majority have responded positively with the repayment of their outstanding fees and a number have put arrangements in place to meet their outstanding obligations to the company.  As we previously advised those who have not responded to our offer or have chosen not to accept the offer still have outstanding monies owing to the company.  In the interests of all shareholders recovery actions are now being commenced.

For those growers who have not yet put arrangements in place we suggest that they do so immediately.  Whilst the DOCA has been completed with the Administrator, it is important to remember that only those Growers who form part of the Grower Group are protected from recovery of outstanding fees by the Administrator under the provisions of the DOCA. 

Additionally, management fee invoices will soon be issued by the company for the management fees up to 30 June 2009.   These are the amounts determined by the Administrator as payable based on the harvests of the 2005 to 2007 Projects that were completed by them. Those 2008 Growers who were also notified of their accrued management fees by the Administrator, and have requested to, and have paid their accrued management fees to June 30, 2009 will not receive any further cage rental or management fees that need to be paid this year. Those 2008 Growers who have not elected to pay the accrued management fee component will be receiving a cage rental fee next month for the 2010 cage rental charge.  This will be as described under the Project PDS.  We remind 2008 Growers that this is an annual fee that will be charged.  The AIL offer reflects that management fee costs have already been incurred on their behalf by the company and assessed by the Administrator. This means that Growers can pay these fees now and these payments will be reflected along with other fees upon harvest of the 2008 stock.

From an operations perspective we are very pleased with the results that we are now experiencing.  We now have a great deal of confidence that our strategy for abalone husbandry is effective in meeting our objectives.  Importantly, we have implemented strong management and measurement protocols to ensure a detailed monitoring of the stock to further confirm and appropriately analyse the performance of the grower/Investor stock.

There has been plenty of operational activity at Elliston and our team have been working very hard to meet the challenges and objectives of the company.  The commitment has been excellent; morale is high and buoyed by the recent encouraging results.