disappointing up front terms, page-13

Whilst I am dissapointed with the up front payments, I am not totally against the sale, which represents a change of opinion for me.

We have seen over the last 6-12 months that GUF do not stick to deadlines and are poor communicators. The deal struck by Nick has positive attributes IMO, which are:

# Strengthened our balance sheet.
# GUF shares should appreciate in value and GUF have 220 million shares on issue, so CAP holds just under 1% of GUF.
# Mongolia seems to be the place to be at the moment and CAP now has an indirect interest in Mongolian coal through their holding of GUF shares.
# If exploration costs blow out due to bad weather and are again delayed, CAP will not have to spend valuable cash bank rolling an exploration program that may take years to complete.
# If coal is at depth (not at surface), the project costs / dynamics could blow out and CAP has no exposure..
# CAP will receive a decent royalty if the project moves into production and has no downside risk.
# CAP had no real leverage regarding the exploration work completed by GUF.

If the project does not get off the ground, CAP will have received $4 million for tenements that they paid around $150,000 for.

Only time will tell how good a deal this was.