Hi Tau!

I was able to chat with Dave Richardson and Bill Chorobay over coffee in July. One of the points that were discussed is that the last PP raised over $50 million, but they had an offer on the table for more than double that amount, if they had wanted to do the deal. They chose to take down the $50 million at that time because they knew that it would be enough to get multiple drills turning and explore the hell out of that property area for several years, without having to tap the market again. That is the stated objective of the company, and they are doing exactly what they told the investors they would do.

It was also pointed out that the money was raised without warrants attached, and therefore is less dilutive and contributes to a tighter share structure. Also, insiders and management participated in the placement, as they have done on every issue prior to that. To me its a big vote of confidence when you have management putting their money into a company, instead of selling into strength and getting out, as most other juniors are notorious for.

I think KXL is one of the best funded juniors out there, and that is one of the reasons I chose to add to my holdings last week, which I regret are still modest in comparison to many other juniors I own. I doubt we will have these sluggish conditions persisting in the market for more than another year, and I think there is enough money in the treasury to last at least a couple more years even at the current aggressive pace. When the time comes to get more money in hand, perhaps the story will be much stronger, and as a result of exploration success the stock will be a multiple of the current price. It would be far less dilutive to raise cash then, and we would all be happy that they chose to keep drilling.

cheers!

mike