Ann: Appendix 3B-KBL.AX, page-5

The following may or may not enlighten you.

It is a .mac document for WxMaxima:

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/*
61,853 ozs Au at Pearce plus 13,706 at Pearce North.
76% (i.e. 0.76) is KBL's and 24% is sold at 18% discount (i.e. 0.82) to market (AUD 1300)
cost of production is 900

http://clients3.weblink.com.au/pdf/KBL/01763923.pdf for number of shares:

1367438524 + 28954516 + 1221158490


*/

shares : 1367438524 + 28954516 + 1221158490 + 243439934 + 37500000 + 50000000 + 40000000;
shares1   : 1054658490 + 28954516 + 989658490 + 232500000 + 500000000 + 50000000;
gold1 : 61853;
gold2 : 61853 + 13706 ;
price : 1300;
cost   : 900;
plant : 11.2 * 10^6;

/*
The latest dilution is in but later we may change the number of shares
Note that I will go through the list more carefully later as some of the options
would now only be exercised if KBL found a big stack of pure gold.
*/

/*
With Pearce only:
*/

gold1 * (0.76 * (price - cost) + 0.24 * (0.82 * price - cost)) / shares;

/*
With Pearce plus Pearce North:
*/

gold2 * (0.76 * (price - cost) + 0.24 * (0.82 * price - cost)) / shares;

/*
... but gold is now AUD 1735 / oz, so with Pearce only
*/

price : 1752;

gold1 * (0.76 * (price - cost) + 0.24 * (0.82 * price - cost)) / shares;

/*
gold at AUD 1735 / oz, Pearce and Pearce North
*/

gold2 * (0.76 * (price - cost) + 0.24 * (0.82 * price - cost)) / shares;

/*
Note
1. - no allowance for the money owed - convertible notes?
2. - no allowance for gold recovery rate (flotation 70% ?)
3. + but no allowance for other Au recovery phases.
4. +- this is not discounted back to a present value - regarded as unnecessary for the "barbaric relic"
5. + no allowance for recovery of other metals (esp silver)
6. + no allowance for CIL or processing other miners' output.
*/

/*
Assessment: looks somewhat healthy, even with all the dilution

KBLO not or scarcely trading at AUD 0.001
KBL trading at AUD 0.003 Aug 22 - Close
*/

/*
Also 11.2 * 10^6 on CIL and flotation (but with no depreciation):
*/

plant / shares;

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Run it and reflect on the results.

Criticism welcome.

Enjoy.