Ann: Quarterly Activities and Cashflow Report , page-3

The CR was always on when the BFS was completed. The only real cash that MGY has was from US$2,000,000 in cash and 7,500,000 Energizer shares on signing the JV. The property in Madagascar just kept them going. I don't know about it being a small CR though.

RAB

Malagasy and its Madagascar subsidiaries will enter into sub-leasing arrangements with the joint venture
company in respect of its permits, which will allow it to retain title to those permits during exploration and until
Energizer delivers a Bankable Feasibility Study (“BFS
”) on any discovery it makes. Energizer will manage
operations undertaken by the joint venture.
Malagasy’s interest in the joint venture
will be free carried until Energizer delivers a Bankable Feasibility Study
(“BFS”). If Energizer or the joint venture company delivers a BFS on any discovery, Malagasy will have the
right to contribute to development and mining operations
in accordance with its 25% interest in the joint
venture or may elect to dilute its interest.
If Malagasy elects to dilute its joint
venture interest to below 10%, then Malagasy’s interest will convert to a 2%
net smelter return royalty.
If the joint venture company makes a decision to
mine on any discovery, Malagasy and Energizer have agreed
to complete all the requirements to obtain the relevant mining permit to allow the joint venture company to
undertake mining operations in the defined area.
Terms of Agreement
The HOA is subject to Energizer being satisfied with
the outcome of its due diligence enquiries in relation
to Malagasy and its Madagascan subsidiaries that hold the permits.
Under the terms of the HOA, Malagasy will receive:
•
A non-refundable deposit of US$250,000 on execution of the HOA; and
•
US$2,000,000 in cash and 7,500,000 Energizer s
hares upon signing of definitive agreements and
the successful completion of the due diligence review