Greetings all. I've been too busy to post in the last couple of...

Greetings all. I've been too busy to post in the last couple of days but I had a phone discussion with a KRL director on Wednesday and wanted to provide some feedback to the forum on what was discussed.

The most pressing question I had was about the marketability of Pakar coal, in particular the low rank stuff in South Pakar. As anyone following my posting will know I've had concerns about the true value of this coal when the IER suggests there was a limited market of anythig below 3000 kcal/kg.

i won't quote him verbatim but the gist of the response was that there definitely is a growing market for this coal primarily in India. In addition to this there is a suggestion that much like the Mamahak operation coal could well be sold into contracts with Bayan at mine gate and that should this be the case a quite reasonable margin is envisaged. I had concerns about profitabilty and wasn't sure that the price we could expect for the coal would exceed cost to mine but I'm assured this isn't likely to be a concern. The strip ratios at Pakar are such that mining costs should be very low.

I was also assured there's no question that Bayan are very keen to get access to Pakar and that there's no suggestion that it was a lumped in deal to get control of KRL. They really do want the coal from Pakar as they see the sales potential already in place.

The sticking point for me on the deal, the 380million shares to Jedi Resources I'm still not much happier about. The consensus on this seems to be that it's a necessary part of the deal so live with it. Knowing that Pakar should be a profitable venture for us makes me a little less irate but I still think it's ludicrous and I'm still voting down Res 3.

As a side note I found the director I talked to to be quite the salesmen even under fire and given that he's said he will be hitting the ground running after June 13 selling the company to potential investors I'm confident that the result should be a better market presence. Our market cap is going to be massive after this deal, in the order of $500million and this will force quite a few fund managers and larger investors to have a look at KRL who at $10Million would not have bothered.

Hope this is informative.