kagara gets rid of its lounge lizard, page-32

I fail to see how this is a good deal...Lets go through it

1. 5 or 6 years ago KZL purchased LL for 25M, at the time it was an exploration target.

2. Over the years they have probably spent 10M+ on exploration...i think the deep holes they drilled last year alone had a $4M budget.

3. In 2009 they paid 20M to WSA for ore access (at this point the LL investment was looking to be a master stroke)

So total spend is in the order of 55 to 60M. So accounting for CPI, there has been negligible value adding despite significant exploration success. My gut feeling is that the banks have forced KZLs hand with this sale...the half year results should reveal all. But note, if the banks are calling in their loans, all the LL proceeds will go straight to the banks leaving little capital for the expansion plans. This could be a catalyst for yet another capital raising as they can’t push back development projects such as King Vol.