please explain, page-6

yes, a capital raising is on the cards. the company has had a active quarter, so most of the available funds, will have been consumed. from what watso can see, the caz shares, that gda received for the sale of the mt caudan leases have already been sold,

appendix 5b, from the last quarterly gives the following information

Payment for purchases of:

(b)equity investments (655)






1.9 Proceeds from sale of:
(a)prospects 863

........

the payments for the equity investments, and subsequent sale, fit in nicely with the report dated sept 7 , which provided the following information

"The agreement for the sale of the Company’s tenement interests was first announced on 3
August 2009. The proceeds of sale received by the Company were $207,500 in cash and
$655,000 in shares in Cazaly Resources Limited. "

$655,000 worth of caz shares, and the $207,500 cash, nicely works out to the $863,000 that the company received for the sale of equity investments.

watso is a bit surprised that the company did not get a placement underway, when the shares were in demand -

so what will be the terms of the issue?????, earlier this year, watso would have speculated that an issue at 1c would have been on the cards, but they managed to sell the mt caudan tenements in time, which gave the company breathing space, and the shares firmed a bit.

maybe an issue of 1 for 3 at 3c - that would raise about $3m, which would be sufficient for next year - or maybe a 1 for 2 at 2c - that would raise the same. if an issue is made at 2c, that might tempt some option holders to convert, thus raising extra funds. ok - how about a 1 for 2 issue at 2c, with a free option. after allowing for the conversion of some options, that could result in an issue of about 180m shares and options, which would increase issued capital to about 550m shares, and about 250m low priced options.

mmm watso started to write this, when the shares were 4.2c - but now they are 3.9c. yes, brace yourselves for a capital raising