changing the kblga trust deed., page-2

Thanks Redfrog for explaining the above.

At a conversion price of 38c the notes are so out of the market, that they can be considered as debt costing 10% which is a good deal for the company and a good return for the note holders

With a conversion price of 12.7c, the dilution cost to existing shareholders is 3 times as high, so I expect to vote against the resolution as it benefits mainly the note holders.

Is a SP of 12.7c realistic? I think so as it represents maybe cash backing + 4c to cover mining assets. At quarterly report we might get a clearer picture, but my back of an envelope calculation is that cash backing per share is increasing about 1c every 2 months. Again what will quarterly report tell us? Not much if the dearth of progress reports is the pattern to be expected.

The directors are not required to continuously disclose how the company is doing unless things change, and they have cut costs recently to boost mining profitability. Are they investing the cashflow in extra mine development or are they keeping it in reserve? We have not been told and maybe they are currently deciding what to do next..

With Capri on 20%+, management dont have to worry about a hostile takeover bid at bargain prices. However Capri would expect a high takeover premium which would make 12.7c chicken feed.