vote of confidence

I believe that Kalahari's recent purchase of an additional 5,456,641 common shares signals there will (relatively)soon be a capital raising for EXT with a placement of approximately 6-10M shares - most likely on the TSX. On Kalahari's website, in the release titled "Circular information on new share issue" 4/3/2008 the Board informs the shareholders that it intends to raise capital. The FIRST (most important) reason they give for raising capital of their own is to purchase more EXT shares -

"...Independent Directors believe that an increase in value may be ascribed to Kalahari’s Ordinary Shares due to the strategic importance of the shareholding in Extract and accordingly are of the opinion that, if possible, it is in Shareholders interests to maintain the Company’s shareholding in Extract. Accordingly, if in the future Extract requires further equity funding for the development of its uranium projects in Namibia, the Independent Directors believe it would be in the Company’s interest to maintain its shareholding and support Extract as it moves forward with developing its projects. The Company therefore
intends to apply up to £8 million of the Placing proceeds to maintain its shareholding in Extract if and when Extract raises further capital. It should be noted that the Company’s intention to either increase or maintain its shareholding in Extract will be subject to Kalahari having the opportunity or right to participate in any future fundraising undertaken by Extract or being able to acquire Extract shares in the market at a price which the Independent Directors regard as being reasonable."

Therefore, I feel it may be reasonable to assume that Peter Mac has relayed EXT's intentions regarding capital requirements to the rest of the KAH Board and that the 5,456,641 shares would be enough to "maintain" KAH's % stake in EXT (after EXT's placement). On the other hand, KAH only spent about 1/3 of the money they had allotted for EXT shares, so maybe they will participate in the placement as well, which means EXT could be looking for more like $16MM. (Any thoughts??) If that's the case, I hope we see a good pop back up to at least the $1.50 range to keep the # of shares issued to around 10,000,000.

What I take from this is it is extremely encouraging to see how valuable KAH Board believe their stake in EXT is. It is even more encouraging to know that on 4/16/08 KAH shareholders overwhelmingly voted to issue 46,080,000 new ordinary KAH shares with the bulk of the proceeds to go towards buying more EXT. Also, new institutional investors were apparently very keen to snap these new shares up according to KAH's NR titled "Results of General Meeting, 14th April":

Mark Hohnen (KAH Exec.Chairman)said, "I am delighted with this response from both institutional and private investors. The overwhelming support in favour of the resolutions endorses our strategy and is a huge vote of confidence from our primarily London based shareholders. With the placing now finalised, where we welcome a number of new institutional shareholders including Blakeney Management, we are in a very strong position with cash resources of approximately £16 million to progress our aggressive growth strategy.
These funds will enable us to continue to develop our copper and base metal projects in Namibia, and will importantly allow us, if possible, to maintain our
stake in Extract Resources Ltd (ASX and TSX: EXT"

Wow, now that was long-winded. I rarely post so I geuss I had a bunch of "pent-up" typing :) Good times a-comin'!!!