Regulations this week.. Finally, page-169

Hi Folks

Michael Corleone would be proud of these Regs.

Like the alleged Barrick Gold punitive damages bill of 190 Billion USD demanded by the Tanzanian President last year for unpaid fees and taxes - remember they have accepted 300 Million in settlement!!!! - these Regs are a wish-list document that Tanzania cannot realistically enforce. Regrettably, this is the way things are done in Africa.

The underlying theme in the Regs is the requirement for Tanzanian citizens to be looked after and that the local resources be mined responsibly by foreign companies in joint-ventures with the government. That basic philosophy is shared by KNL, which has never sought to plunder the resource or exploit the people. The mechanics of how we move forward is the issue here in my view.

Relationships are everything in Africa. Fortunately, our company history and corporate pedigree in Tanzania - think Resolute Mining - is excellent. We need our management team to step up here and provide we shareholders with some confidence that they have a plan for negotiating a way forward in a timely way. A deafening silence in recent weeks is not a long-term strategy.

If President Magafuli - aka 'the Bulldozer' - seeks to rigidly demand that foreign companies provide the research, infrastructure, money, training and then gift more than half of their revenue to Tanzania for the privilege of a local mining licence, no-one will realistically do business there. The country would become an economic wasteland in no time. There is only so much profit in the ever-diminishing wildlife-tourist dollar. For all of his bluster, the Bulldozer knows this.

My underlying fear is that the Chinese will smell an opportunity to swoop into the country and exploit the place while back-handing all the local politicians and labour-suppliers until there is nothing left. The Tanzanians will not know what hit them...we have seen it all before in Africa.