RG Option Agreement, page-70

For those that have left the party is coming back to justify their action, no fear. Like I said initially I was disappointed with the deal, but after thinking things over and reviewing the whole deal, it is not as bad as it appears. My previous experience as a CEO in a public listed company in SE Asia in a high volume business and my experience as a MC in Asia prior to my return to Australia entitled me at least to give weight for a reasonable deal closed by management. In high volume business the net return to gross sales is 4-5%, thus my conclusion that this particular deal is more than reasonable considering that a JORC has not been completed for our estimated findings, further exploration expenses have to be spend to detail the areas of our findings and work to be done on large areas beneath the explored and unexplored areas.
A haul road has to be build to bring in the ore for processing. All these involved great expenses that BGS will have to find to share with Rangold. After all these, we could get 15-30% and that we could have to have CR and further dilute our capital base and the end result could still be only 5-8% of gross sales after taking on further risk and utilizing more capital. By doing this deal, we have totally derisked our business venture in gold and get a full 4% royalty on gross sales. We still benefit from a rising gold price, benefit from RG's expertise in further and more detail drilling and further exploration on other untouched areas in the locations agreed upon. Management has done well and KJ has left Koting for further exploration on our own, and who knows, there could be more gold to be discovered in other areas. We will have a steady flow of income from our gold agreement and the lithium project to look forward to.