Ann: Proposed Consolidation of Capital, page-254

Yes, it is the grade, they will need financian for a mill and there is no evidence of profitability when compared to Spartan Resources and the fact that Spartan has no debt and has already paid for a Mill. As I said I hold both and have done extremely well with Spartan. If you listen to Mine of Management a while back when they were talking about Calidas's issues they mentioned, they thought it might also be the reason why it is holding DEG back. Calidis is now a mess because they had hedging in place and borrowed from Macquarie. I had a brief look at there PFS and DFS and it showed that Margins were suppose to better. Production and margins were significantly worse. As a result they were never going to meet delivery of the hedges and they were losing money as the hedging was done at a lot lower gold price. They said even at today's gold price they still would of had issues, based on production. So there is still a lot of risk in this.