Ann: Kathleen Valley Debt Facility, page-217

I am inclined to agree with all your points, but most of all I agree that the debt may not be repaid even if we are flush with cash. I am not an accountant, but the company balance sheet needs to have a decent debt component for efficiency reasons. There is the tax deductibility of the cost of debt that allows the weighted average cost of capital(WACC) to the company to be less and the "return on capital employed" to be optimised. As long as we are profitable we should keep debt on the balance sheet as per your comments with the proviso that the debt cost should be kept down. I think +4% margin is very high and will have to be renegotiated as soon as we become established as a producer and are profitable.

regards
DF