Ann: NSW Mineral Exploration and Investment Prese, page-19

re: Ann: NSW Mineral Exploration and Investme... Thanks for the feedback and the encouragement.

OutbackOracle, in my heart of hearts I agree with you because sanity should prevail; but lets look at the worst case scenario, because CAP can theoretically of course end up with the short straw here.

If (as per the 3rd outcome above that I noted) BMG just refuse to pay up the funds, and ASI cannot dislodge Hillam, then CAP somehow has to buy back the stake from BMG. Right now we do not have enough cash to do this, so CAP's very first capital raising would have to take place. Matters of pride aside, CAP wouldn't just raise the difference between their cash balance and the $13M, because then they wouldn't have funds to use. Something in the vicinity of $20M would need to be raised in my opinion. At these prices, that would be some serious dilution. Luckily, provided the worlds markets stay in one piece, the coal news just around the corner should lift CAP back up to higher prices. At 50c per share, another 40M shares would need to be issued. Even that still is hefty dilution.

So hopefully people can see my point here. We need Hillam gone sooner rather than later, because even if CAP buyback BMG's stake and then JV with ASI in a new agreement, our registry is still going to cop it pretty bad if capital has to be raised around these levels.

We could of course just let BMG keep the 40%, but that would be suicidal because they would have no chance of meeting the CAPEX requirements if they can't transfer a measily $25M to CAP as per the next step in the JV.

As I said, sanity should prevail, but dilution of our holdings is the risk if this all goes up the proverbial creek; I would be lieing through my teeth if I didn't stress this point.