and i thought bergen was a joke..., page-44

It's not just the reply I got that smells like BS Hope. I've been thinking about it this afternoon and something just doesn't add up here...

What we know based on company announcements:

• Penumbra is being fully funded by current cash, operations and ABSA.
• Columbia due diligence is funded by Bergen, and the acquisition costs are funded by a $15M finance facility (see May 17 release).
• Working capital for Vlak and Ferreira is a part of the mine opex and is funded by revenue from coal sales.
• Extra South African development is funded by the $20M in SIOC funds and mine cashflow.

The only facets of the company that don't have a direct line of finance are Botswana, but no real progress can be made on that until the assays are released, so there shouldn't be any urgency to raise funds for that project in the short term.

The fact that the raising has been proposed without a formal budget suggests that this is an emergency fundraising effort to keep the company solvent. I will mantain this theory until the company proves otherwise, because they've done a piss weak job of justifying the raising so far. The issue here is that if there are insolvency concerns, that raises the question of how Conti will service its debt used to develop Penumbra and possibly acquire Colombia.

By the way, the Colombian mine might run at high margins, but its production rate is presently very low, especially given that Conti will only be grabbing a 50% chunk of the pie. I would expect anything but a smooth ramp up at that mine if they end up buying into it; no doubt more capital will need to be raised down the track to fund the ramp up capex (machinery, transport, larger prep plant etc). I fear they're going to dilute this thing to death if they go up the Colombia path, as if they aren't planning to already with this absurd $10M placement.

One more thing, if Jason believes it would be good to test out areas away from South Africa, then does that not seriously question the integrity of their South African assets? They seem to have jack all confidence in the country that most of the board would call their first/second home. Speaks volumes.