Ann: Capital Raising of up to $10.3 million, page-24

Shareholders who were hoping an experienced steel maker (big or small) would be announced as a major investor or project partner (and thereby confirm the merits of KFE's project) will be disappointed by yesterday's announcement. With the feasibility study ready to go it was a major opportunity to bring in real technical and financial horsepower.

I agree with bubsmark's comment about funding being secured. Only the first $2.14m is locked in with the second $2.14m subject to a low price get-out clause and the final $2.5m subject to mutual consent. Depending on how you read the announcement, if the share price collapses prior to an allotment, KFE may be forced to repay the first $2.14m (or subsequent advances) with a premium. It seems like a deal weighted in favour of the investor. But some cash is better than no cash.

If the share price stays well above the 1.8c issue price of the non-renounceable rights issue, perhaps a substantial proportion of the $3.8m target will be raised from existing shareholders. If the share price sags, how many shareholders will take up their rights?

So, of the "UP TO $10.3 MILLION" announced by the board yesterday, how much will actually make it to KFE's bank account?