Ann: Mbila Update , page-58

Spot on....a HUGE paper loss at the moment.

Haven't been averaging down for a while either, as I already have a large position.

Very, very painful.

As for insolvency, it has to be considered as a possibility. Clearly, they still have the support of the convertible note counter party, as the repayment date for the $2m advance has been extended to the end of the quarter. The $2m is part of an $18m deal, which hasn't been inked as yet. Makes sense that this will get cemented some time soon, given the continued support (although I guess stranger things have happened). Of course, now that the Kangwane BFS has been finalized, they might try to skip the con note altogether by going for full project financing, with a bank, trading house or end user.

As for Mbila, well, we clearly aren't going to proceed with it. ZYL have stated their position, and now we wait to see what the vendor has to say. I can't imagine them just rolling over, so there is more than likely going to be some argy bargy, either in one on one meetings or a court. At a guess, there will be some sort of negotiated settlement (but you can never predict these things with any accuracy).

I don't think it's been mentioned recently, but with a whole bunch of new holders between 1 and 4 cents (and some very tired longs), a commodity trading house or end user could take us over for mere chump change right now...and I don't think any uncertainty around Mbila would deter them either (just pay the vendor out and either on sell the project or spend the money to explore those 53,000 hectares). If it was me launching a takeover, I'd let it churn at these levels for a while longer, letting the register build with new holders who'd be thrilled to get a quick 5 or 6 cents for their investment.

Big risks, but equally, big potential rewards at these prices.

I just hope Ian is working his ring off to secure the funding that we need (and that Kangwane's BFS should justify).