Ann: Quarterly Activities Report , page-5

Hi lordolean,
Thank you for your contrarian view on KRM; its always appreciated.

I would like to respond:

(a) In the worst case scenario, if Talang Santo is delayed, I believe that KRM
would again pre-sell silver rather than CR. This is what they did in 2010
to avoid dilution. This Credit Suisse contract expires this month.

(b) Gold miner costs have been a matter of controversy over the past 6 months
and it is a complex matter to resolve. Instead I'd prefer to compare KRM
& MML's fundamentals using our biggest gold miner & the world's 5th biggest
gold miner NCM as a bench mark; so here goes:


Item......................KRM.........................MML...................NCM
_____________________________________________________________________
S/price.................$0.81.......................$4.92.................$23.63
MKT Cap...............$236 mil.................$929mil.............$18 bil
# of shares............292 mil...................189 mil...............766 mil
Debt......................2.80%...................... 0.......................16.08%
EPS.........................6c...........................25c.....................$1.46
P/E.........................12.61......................19.78..................16.21
Div. Yield................4.94%......................1.42%..................1.48%
12 mos Hi/Lo......$1.49/$0.72.........$6.70/$4.92......$36.10/$20.89
Net Profit:...............29.20%..................60.58%.................26.61%
Op Mgn..................49.58%..................59.22%.................37.71%
ROA.......................26.33%..................15.95%..................6.22%
ROE.......................31.45%...................16.63%.................7.77%
EBITDA..................$44.19mil..............$59.22mil.............$2.226bil.

Please note: these are the latest annual data available (I have added-in
Mr Phillips' $5 mil loan to KRM debt)

On the above comparative data, KRM for the most recent start-up is doing well.
Most analysists regard ROE as the most inportant stat.

I know that many MML investors do not like KRM being called a mini-Madusa
but the media has used this phrase because KRM, like MML, is a narrow vein
UG miner, both started mining early rather than spend more money on JORC drilling, Mr Phillips played a key role in establishing both mines and KRM's
mine manager is ex MML.

KRM has been very unlucky because the fatality delayed Talang Santo 6 months at a time when it was transitioning from Way Linggo to Talang Santo.

I have met the CEO & Board at a presentation in Sydney and I was very impressed
with their obvious dedication and expertise in this difficult form of mining.
Management, via KRM Management Pty has serious skin in the game as also have individual directors which is why i believe that a CR will not happen.

Like the September fatality, there's always Black Swan events in mining but
one simply factors-in such risk before investing. Even BHP & RIO have had their share.

IMO, once Talang Santo reopens, both mines will be safer because of the recent setback.

The stock market is supposed to look forward and once Telang Santo re-opens
that's what Mr Market will do.

Your contrarian view is, nevertheless, appreciated.

With kind regards
moorookamick