Ann: Half Year Accounts, page-2

Hi Andy, Robert & all,

I have had a quick look through the half year accounts and my thoughts are as follows:

(a) everything is as expected with the FY guidance still 30k to 35K ozs
with 12,055 ozs produced (10,353 ozs sold) this leaves 17,945 ozs to 22,945 ozs for second half.

(b) while our cash position is $6 mil odd, we have an additional 1700 ozs of gold unsold
(difference between production and sales) which amounts to A$2.25 mil @ A$1500/oz
with the costs already factored-in to 31st Dec.

(c) Loans outstanding to Mr Herryansjah of PT Natarang Mining of $3.45 mil USD (or $4.5 mil AUD) can be looked at as either an asset or if we offset it with the $11 mil AUD outstanding loans , this would reduce the net loan position of KRM to $6.5 mil AUD, IMO.

(d) if we subtract "Trade and other payables" $5,192,228 from "Trade and other recievables"
$7,712,586 we get a positive balance of $2,529,359.

(e) Vat was deducted which may be later recoverable

So if we leave item (c) to reduce the net loan to $6.5 mil we have ;
cash: ..........................$6.080,000
unsold gold................$2,250,000
Acs rec - acs payable.$2,529,359

total: $10,859,359

In summary, IMO, the fundamentals of the company are as before with all the information
been already announced. All in all, the financial result is positive, IMO.

While the FY production forecast has been maintained, there has been no further
indication on when the Splay vein will come into play and full throughput
of 385 ton.day will be achieved. Lets hope that its sooner rather than later.

Moorookamick