options for kzl, page-9

According to Geoff an equity raising was at the very bottom of the drawer as he was pretty sure of finding a better way other than going back and tapping the market on the shoulder. I suspect the temporary closure of the remaining operating mine was to preserve as much capital as possible until 20 mill comes out of escrow from MUX on June 09, which is 4-5 weeks away and probably about the maximum time they can live off funds from processing ore stockpiles. It may also indicate that ANZ did not agree to provide as much funding as they want or need. It's clear that this is disappointing, but we do not know the full story yet. I guess 20 mill might buy them another quarter and give them a chance to sell off either AB or Southern Region assets.

Guangdong agreed to provide Kagara with a short term funding loan of $10 million back in 2009, subject to the approval of Kagara's banks for refinance. I imagine we have the same catch 22 now. If I were Guangdong, I would just buy Kagara outright subject to the AFIRB.