Ann: Cabinda Resource Upgrade , page-7

Hi Kruiser,

I've got my holding for now (500k @ 0.014) will look to add with other profits from my UK shares as and when..

"Seems everyone else wants out"

volume doesn't suggest so but i know it was a tongue in cheek comment :P

problem is the spread...usually 20%+..makes trading difficult

..................

I have spoken with the company quite a bit recently..

Here's a bit of info ...

1) "first refusal clause" JV DRC asset

Asked if the agreement was in the public domain to see if i could get my hands on it but unfortunately it wasn't... the document is quite clear for exiting via offering JV "first refusal"

2) Angola licence renewal

in hand.... not worried, just it's taken time as it's a new bureaucratic process for them (Angola)

3) funding

Long term funding/securing partner..... I note this has been ongoing for some time and is probably the main reason why there is such a massive discount from NPV vs market cap for Kanzi & Cacata without any of the other development projects on the books..... What's been the main stumbling block securing a partner ? With such low opex and capex costs and strong IRR , im not sure what im missing ??

The mix of the two countries is a stumbling block. Investors are polarised. They like one or the other generally but not both. Another reason to pull out of the DRC. We have interested investors and we are wiring through a process now that will hopefully bring some deep pockets on board.

4) Outlook/going forward

Cacata BFS is estimated at $5.7M on a 100% basis.

Regional exploration program to prove up more resources as a priority. The potential to develop Chivovo into a satellite feed deposit for Cacata is high and from what we have seen in the ROC (Cominco), there will be a lot of continuity of these grabens.

5) Re - rating

Companies are not usually revalued at the end of BFS so much now but rather when in execution. We need some funds to get runs on the board.

...........

The way i see it is it really is a "great buy" at current levels, things should start to move with the near term catalysts..

1) Potential windfall from DRC asset sale
(anytime NPV$611 49% interest)
2) Licence renewal
(end of October/beg Nov)
3) Deep pocket funding
(after renewals - Nov)
4) exploration work to prove up more resources.

Item 1 could be for multiples of the mkt cap..

item 3 would re -rate ..

Hope this is useful for all