For both GRZ and KRY the position, expectations and action of the bondholders is critical.

I'm not fully up to date on the KRY financial position but I can give the situation with GRZ to the best of my recollection and someone who knows the KRY equivalent figures can use this as a guide for the KRY case.

GRZ's convertible bonds face value in total is just over $100 million. GRZ has over $60 million in cash and cash equivalents and about $20 million in saleable equipment. They can pay their legal fees and service the bonds which pay 5.25% pa until well after the arbitration is final.

GRZ's bonds can be converted to stock at about $7.50 a share at the option of the bond holder. They run until around 2020 but there is the option for early redemption in 2012 where for just one day, the bond holders can elect to get paid out. At the option of the company, that payout can be either cash or shares (at market prices) or any combination of the two.

GRZ has under 70 milllion shares issued. If all the convertible bonds were converted to shares at the convert price of about $7.50 there would be another 13 million shares making a total of approx 83 million. Because GRZ is well cashed up any additional dilution is unlikely.

Assume that GRZ gets a $1 billion ICSID settlement that would be equal to $12 a share which would mean the bondholders would be far better off waiting for the settlement, converting their bonds and then cashing out in the market than any other option. If GRZ gets more than $1 billion then of course the deal is even better for the bondholders. If GRZ only settles for $620 million, the conversion deal is break even for the bond holders (but they would be still is profit) and any less than $620 million it becomes a crap shoot for them.

Of course $620 million settlement is still over $7 a share for the ordinary shareholders so they are quite likely to be happy, even though it would probably still be a couple of years away. If GRZ gets the full amount of $1.9 billion (unlikely but possible) then the payout to everyone would be over $22 a share. I would wait a couple of years for that.