Ann: Update on Capital Structure, page-2

INITIAL TAKE

The Prospectus sets out that:

"The primary purpose of the Offer is to facilitate the redemption of the Company’s Convertible Notes on issue"

Convertible notes on issue total $7.07m (incl Perren & Grigor), out of the total amount of $11.6m sought to to be raised, before fees.

So , even if there is 100% raised, which is highly unlikely I suggest, the noteholders will get paid out after having received a juicy 10% return for many years and now their full capital back. If the take up is less than 100%, the Note redemption allocation is pro rata.

The Prospectus also sets out that ........."Completion of the Offer will have the effect of an increase of $2,843,876 on the Company’s
cash reserves where the Maximum Amount is raised and all the Convertible Notes are redeemed"

If the amount raised is less than 100%, the extra cash raised will put bugger all into the kitty to restart the drilling program etc, and do all the wonderful things they have been promising for the last millenia, and not achieved

Winners- Note holders who get their full capital back
NAG wont have to pay interest on the notes ($700k pa)
Losers - Very little extra funds to restart drilling and move any projects forward
SH substantially diluted
Lifestyle directors will continue to get paid

This looks to me like a scheme to bail the Noteholder mates out, and not providing the funds to advance the company projects along

This is up to the usual management abilities of the BoD.