options value, page-10

If a joint venture ever occurs with the farms, Genorah's share will be 26% as per minium BEE legislation. When the Con Court decision was first handed down I did the maths and worked out that if Genorah was to lose any of these farms some of the 240 million shares issued to Genorah would have to been returned. The maximum amount I calculated they could lose before it put that 26% post JV in jeopardy was 80 million. Now for arguments sake 3 farms divided by 240 million shares is 80 million shares issued per farm. If Genorah do lose 50% of "N" then 40 million shares should be returned.

Now to the point of capital raising if it's required. Roughly the same amount (80 million shares) can be issued without Genorah going below the 26% post JV. If they do return 40 million shares for losing "N" that amount of shares issued cant exceed 40 million. 40 million @ say 35 cents is 14 million AUD. We still owe 50 million to International Goldfields but the amount should also be reduced. Genorah cant reduce their holding by 52 % pre JV and currently hold 60%.

I think the best way around this is to extend both the directors/Genorahs options and also the listed ones hoping that with some positive announcements to come they are in the money and exercised providing capital also keeping the balance of share holdings more or less the same. No commission paid on exercise of options unlike a capital raising were we tend to lose about 10%.

I like many others purchased options based on time frames provided by the company. BFS due dates, Xstrata option date etc. Now that these dates havent been met I dont think the shareholders who have brought options should be the ones penalised. By extending the option dates also rewards the shareholders for their aguish over the last three months plus showing where possible future funds can come from providing the short term goals of the company's are met.

Congratulations Peter Landau on your purchase today and if the other directors were to do the same it would give me a great deal of confidence that the board can see things moving swiftly forward from here on in.