I haven't contacted KNL but my reading of the Annual Report, the...

I haven't contacted KNL but my reading of the Annual Report, the latest Appendix 3B and KNL's announcement on 28/10/10 (Performance share terms) is that the 22,500,000 shares relate to the nickel project not the graphite project. Sorry, I would have loved it to have related to the graphite project too as I bought back in today after exiting 3 weeks ago.

Note 24 on page 49 of the Annual Reports in relation to the acquisition of the nickel project refers to

- 22,500,000 performance rights that will convert into 22,500,000 ordinary shares upon achievement of milestones.

The 26/9/12 3B refers to 3 lots of 7,500,000 Performance Shares (Classes A, B & C) being on issue (ie total of 22,500,000), escrowed to 29/10/12.

The 28/10/10 announcement set out the conditions of conversion of each of Classes A, B & C into ordinary shares. For Class A, this includes drilling of 3 holes with a minimum 4 metre intersection grading at least 1% nickel no later than 3 years from the date of issue. For Class B, this includes JORC of not less than 5m tonnes of nickel with a grade of not less than 1% nickel no later than 5 years from the date of issue and for Class C, this includes JORC of not less than 10m tonnes of nickel with a grade of not less than 1% nickel no later than 5 years from the date of issue.

I don't think any of the Performance Shares are eligible to be converted.

The graphite Performance Shares number 15,930,000 and are escrowed to 20/1/13.

I'm happy to be proved wrong but this is my reading of the situation.

Here's hoping KNL issues a good announcement or two next week and the market re-rates the stock as it looks far too cheap compared to SYR.

GLTA