Ann: Response to Shareholder Letter , page-2

I must have it all wrong.

Point a) ... have been in contact with shareholders.
Really? I am 'right up there' but haven't heard a peep!

Point b) ... cut back on costs....
Well with around 600k per quarter on 'admin' that shouldn't be too hard?

Point c) .... not unusual.... In some circles, you are right there. I remember going through the same gutting with GAU.

point d) a commitment to grow the company and hold shares? At last! Thank god. So what was the commitment over the last 3 years and why did the board not take up a significant number of shares in the last cap raising?
Or why were the options so short term considering you had been working 'for 12 months' on the dilution?
Recently we were told KEY was going to watch expenses. I cant see how we will be able to afford to pay the salaries of the proposed management team when we are going from what - 4 well paid directors to 8 management staff 'with 147 years' experience?

point f) two years to accumulate the cash?!! with MORE salaries and a negative cashflow at the moment!!!???
I thought we raised capital (around $4m) twice to drill this UK well (according to the prospectus)?
No. I think the UK is a lemon or we would have drilled it twice by now. In my opinion, subject to auditing of the books by new management, it might be best to shut down the field so we can stop pumping cash into the ground and turn this back into a shell. Put a new board in. Minimize costs and take a few months (ie no fat salaries and fancy offices) and let a new board find a better reverse listing proposal.

As for the 4c price. It is meaningless.
As for the 1.5c KEY price, it is a sign of what the market think of the deal.

SURELY the board MUST see that many shareholders have lost confidence in them after a shareprice slide from 50c to 1.5c DESPITE a very good TZ discovery???

Why not just step back and let a new board have a go. Surely they cannot do worse and it gives shareholders hope that a new board might do things differently which, IMO, it looks like KEY is in need of.