from the agm

So it was important to note that there were some big hitters from Bayan at todays AGM including
Russell Neil, chief development officer and the main man at Bayan, Dato Kwong. Not sure if you are aware but those seeking to get re-elected onto the KRL board, were the sales and marketing chief for Bayan, and of course Mcleod, who is there CFO.

Really a whose who of one of the largest coal mining companies in Indonesia. Their tie in with KRL is absolute.

All the action started when the KRL chairman tried to introduce the rem report into the AGM. A major shareholder jumped up and challenged a range of issues around KRL, even though their was an attempt to defer him to question time at the end of the meeting.

As a result of his robust questioning I ascertained the following.

1. They have sold coal. 47,000 tonnes has been sold under the contracted arrangement of 70% barged to port stockpile and 30% sold via the I think its called FOB arrangment.Something like this anyway. The full details of these sales will be announced in the next quarterly I believe.

2. There has been a big spend of some $6.7 million recorded in the report, so this has been spent in a number of areas. The main spend came from the pay out of the contractors who were on site at Mamahak at the time of the Bayan tie up. Basically they had to spend some $1.7 million dollars paying out the contractors to terminate their contract. The explanation from the Bayan people revolved around them bringing in all of their in house poeple, contractors and expertise as their assessment and view of the mining operation was it was being conducted with outdated rented equipment by contractors who were not as good at mining coal as one of the biggest coal miners in Indonesia.So in their view they were starting at square one with the Mamahak operation.

3. They have spent considerable millions on the Mamahak operation and the onoging rampup of operations which includes; removal of overburden, the construction of camps, construction of an access road that will allow for year round production, construction of other robust plant and processing equipment. There view is they have achieved a huge amount in a short space of time.

4. So this caused the ire of the investor who accused Bayan of handcuffing the MD, in that since they have come aboard their has been no roadshows, no promotions, no presentations and basically nothing of anything around ongoing investor updates. He accused them of trying to hamstring the capcacity of the MD to influence the share price. He further stated he knew a number of brokers who would be interested in talking to KRL to hear their story. So he was intimating that they are pushing the price down to make it cheaper for them to take it over.

5. He further stated he believed that SP manipulation was occurring as prior to the Bayan tie up the share price had been pretty robust up around 20 cents and that he believed suspect transactions were occurring. He advised anyone who was listening (the room was very small) that in Australia, the ASX and ASIC took a dim view of this type of activity which could result in a prison term for those convicted of involvement in this. Again this was directed at the lower SP for a cheaper take over outcome for Bayan.

6. There are 2 rigs presently on site and 2 more were moving to measure and improve current resource upgrades. infromation on this should be in the next quarterly

7. There are issues occurring with 2 or 3 of the Pakar license consessions that have been challenged by another company who believe they have mining rights over these areas. This is taking some time to resolve. He then questioned as to why they had been issued all of their shares(Bayan that is ) when they still owed KRL $15 million

8. They are awaiting mining licenses for GPK and PJ. They hope to have these by the end of this year. Apparently this takes some time to get across the line.

9. The current issue with the court order freezing Bayans KRL shares does not prohibit them from further corporate activity in relation to KRL. This was specifically asked of Mcleod and he specifcally pointed this out, so in my view he could have stated a big heap of double dutch but addressed this, as I said very pointedly.

10. I noted a number of large shareholders in the room who have been with the Roo since its inception and they were all very interested in the proceedings. My view is they would all be seeking a premium for the large holdings they all still hold and it will not be easy for Bayan to get full control, in other words a pretty big blocking stake.

I see the relationship with Bayan as done and dusted, what I was struggling with today is a time frame as to when they are going to take full control. My belief is it will happen, but I am not sure if we will see further mining/ resource development prior to this happening. Why they would do this and add further value to a possible corporate prey I am unsure
Bit of a wrap of today. Throw out some questions and I will try and get more specific with an answer.

cheers
estate