On Monday, Kalrez announced the Tulloch Group, an Adelaide-based investment group making its first play into the resources sector, would take a $500,000 placement at half a cent and a loan facility for a further $1.5 million.

Tulloch's other investments include racehorses, with connections to the renowned Tommy Smith / Gai Waterhouse training stable.

Chairman Eddie Smith said the new investors had a proven history of literally backing winners and he said he didn't expect them to start backing losers now.

Guiseppe (Joe) Morcorella is the managing director of a public investment company. Prior to that he was a practicing solicitor. Nick Forichella is a practicing chartered accountant and has been in practice for approximately 20 years. Carmine Barone is a solicitor experienced in all areas of commercial law and litigation.

"In today's world, where both intending and existing shareholders demand both corporate governance plus the growth of a company, it is very important that company boards have all depths of experience including a balance of legal and financial expertise to assist management in the running of the company. The company believes all three of these gentlemen assist the company to meet this level of required expertise," said Smith.

He also said he expected that with the appointment of the Tulloch Lodge directors, his nightwatchman partner, Doug Jendry, would tender his resignation in the near future.

Jendry temporarily came onto the board to support Smith in his successful bid to oust the former management of Kalrez and its nominated directors.

The Tulloch loan facility is for 18 months with an 8% interest rate and will receive a further facility fee of 20 million shares in lieu of cash.

The loan facility will be dedicated to funding the Seram JV cash calls. It has been agreed the first draw down of approximately A $750,000.00 will be on the 31st January 2003. Smith said this would be to retire all default cash calls and associated default interest demands.

Simon Lill, who was Kalrez general manager for most of last year, has also left the company.