kagara shares suspended while talks continue, page-33

I have been reluctant to comment on KZL as I do not hold - but have followed the discussion and ramping (up and down) with interest.

IMO, KZL has two issues.

1. There is the short term issue of cash flow to run the business in the here and now. We all know that if this is not resolved (either by a loan or a cap raising), then admin and liquidation is the most likely scenario. GD mentioned when he first became CEO that shareholders gave him a very clear message that managing capital had been a significant weakness for KZL. It would appear (in the short term) that that situation has not got any better.

2. The longer term issue is around the KZL strategy and the ability of the company to execute it. Resolving the short term will not provide any additional capital to execute the long term strategy. BB has mentioned that asset sales of either A Bay or some/all of the southern part of the FNQ tenements will need to be done to provide additional capital to grow the business. Reviewing the strategy and republishing it would help investors know the new direction the company wishes to take. The old direction has been, IMO, aborted by the current cash flow issues.

If KZL continue to do what they have been doing, then the outcome will continue to be the same - i.e. burning cash with no gain for shareholders. I personally think that the business model they are operating under is broken and it needs to be reinvented.

KZL has, IMO, lost the confidence of the investment community. Trust will need to be won back.

HT1