Ann: Trading Halt-KBL.AX, page-21

When i first read the March 2016 1/4 report and management talked about the fact that the bond holders must convert at 38 cents per share if there is a bid for the company that is either successful or recommended by the board, i thought to myself, the board is looking for this to happen so they can wipe out the $13m debt. It was stated in a very overt way.

That got me thinking that there might be some hidden value post wiping out that debt (in a bid situation) but when I looked into their story i came to the conclusion that even if that debt were wiped out, they simply don't have enough ore to make the streaming repayments, trade creditor reductions, the exorbitant head office costs plus pay for exploration and development.

If one was to bid for this company and wipe out the $13m debt, and the head office expenses, you would still need to produce about 5,000 ounces of gold a year (plus other metals) for the next 3 years so that you could sell them to Quintana at ~$250 per ounce otherwise they will foreclose and to find and develop that ore you will need several million dollars in available cash reserves to start with...can't see that happening.

I simply wouldn't back this management team to get anything right...

The comment that Hardrock made about Sorby Hills is very poignant, namely, if it was so good, why is KBL exploring everything else but Sorby Hills?