INTERVIEW WITH JOHN FARRELL, CHIEF EXECUTIVE OFFICER OF VDM GROUP LIMITED (VDM)

“VMG - VDM Group Awarded a 5-year $20 Million Ore Haulage Contract with BHP”

http://www.brr.com.au/event/50823

TUESDAY, SEPTEMBER 2 2008, 10:30 PM.

            BRR    Good afternoon and welcome to Boardroom Radio. Today, I’m joined by the Chief Executive Officer of VDM group, Mr. John Farrell. John, thanks for

10                    joining us today.

            VDM    Good afternoon.

            BRR    John, just out on the market today, there’s some very strong news from your Perth by subsidiary, the Cape Crushing and Earthmoving Contractors, with

15                    the winning of a new contract. Could you tell us the details of this?

            VDM    Yeah, well it’s new to the extent that we’ve only just formalized the arrangements, but in fact the Cape had been working for this client on the beginning of these two projects for sometime, but they have been now formalized into long-term contracts, but we’ve been doing haulage work for

20                    the client (inaudible) (0:00:38) for about 12 months at a lower scale and (inaudible) (0:00:42). So yeah, it’s great because rather than working month to month or year to year, we’ve now got long-term contracts which is a bit unusual for VDM group and its companies, but it locks in about a third or more than a third of Cape’s annual revenues in these two longer term

25                    contracts.

            BRR    John, for listeners, shareholders and potential investors that might not know the full details about Cape Crushing and Earthmoving businesses, could you give a bit of detail about the business?

30        VDM    Cape is one of our early acquisitions. We bought the 75% shareholding we own just after we listed back in 2006. The other 25% is retained by the Managing Director, Mike Heddon. Of course, we have pre-emptive rights over his shareholding if we choose to acquire it. It’s a business that in the time that we have earned it or the majority share of it has continued to grow, it’s

35                    primarily focused on the gold industry and it works in and out and around (inaudible) (0:01:50) and goldmine areas close to that. It’s been a very solid performer from the time that we made our acquisition and in the last 12 months it has had very strong organic growth and that’s forecast to be significantly greater in 2009. It was not an easy business to acquire in the

40                    sense that it is in a very specialized area and we didn’t know too much about it. But essentially, as the name implies, it is in contract crushing as I said mainly for the gold industry, but because of the crushing, it has moved in to general earthmoving, tilings, ponds, road-based road construction and the like. And perhaps most importantly, Mike would be angry if I didn’t make the

45                    point, it’s probably got the best safety record of any company ever in the resources sector. It’s just come up to 13 years of LTIs. That is no lost time incidence. So that’s an unbelievable record. Most companies if they get 12 months, two or three years without an LTI, they are very, very happy, but to have 13 years in an industry where the working conditions are difficult, it’s an unbelievable achievement and it’s a real testament to Mike and his team. So it’s a company we’re very proud of. We’re very lucky that we’ve got a very hard working partner and it continues to grow and this contract is just a function of that.

5

            BRR    Alright John, well certainly really positive news for this long-term contract and we look forward to hearing further developments from the VDM Group in the near future.

            VDM    Yeah, thanks very much.

INTERVIEW CONCLUDED

Contact brr@brr.com.au for more information

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