GWR GroupLtd. said July 11 that it opted not to exercise its placementoption with Excelsior GoldLtd., citing its failure to complete satisfactory due diligencemainly due to inconsistencies between the mine reconciliation data and theblock model provided by Excelsior Gold prior to the signing of the funding termsheet.

Under the A$6.9 million cornerstone agreement in June, GWR has theright to subscribe for about 27.8 million shares at 5.7 cents each by July 8for a principal amount of about A$1.6 million.

GWR and Excelsior Gold remain in talks regarding futurefunding arrangements for Excelsior Gold and its Kalgoorlie North gold project in WesternAustralia.