Why is SLR being sold off?, page-47

Very interesting observations. OMI there is a legitimate reason for treating stock movements differently. When mining the ore is placed in stockpiles which are then processed. Often the stockpiled ore is not processed in the same period as it is mined. Consequently the mining cost for ore to be processed in one period needs to be carried over to the next period or vice versa. That way costs are fairly appropriated to a period relevant to production. However as you say $218/ozs is a large amount and needs explanation (best to do that at the 2014 AGM) and if not provided should be treated with suspicion.

Unfortunately SLR have a history of being economic with the truth. Examples are:

1. They borrowed $75M. (12/12/12) but did not quote repayment terms. There is then a CR for $4.57M in August 2013 "to repay our outstanding debt facilities and provide working capital for our operations" we then learn from A Keith Goode report of October 2013 "$45m fell due at about the end of September 2013 and needed replacing"
2. At the 2013 AGM (slide 28) that the monthly AISC for the Murchison has dropped from ~A$2,600/oz in July and August to A$1,432/ozs in September 2013. From the January 2014 quarterly we see that the AISC for the October/December quarter (before non-cash costs) returns to A$2,042/ozs and receiving A$1,371/oz. Thus on Murchison (13,146 oz for December quarter) they lose A$8.82M. Murchison cost about A$91 (~A$25 over spend) and they have also lost about A$38M in uneconomic gold production (i.e ~$130M down the gurgler). Murchison was left in operation from 1/6/13 to around 1/8/14 - it additionally lost money due to uneconomic production during commissioning.
3. At the 2013 AGM presentation (slide 8) we were told that SLR had looked at their forward strategy and were OK at gold price of A$1,350/ozs for 2 years (with Murchison operating on open pit only (i.e. without opening U/G mines (i.e not spending A$80m Capex over 3 years)). In February 2014 we are told that Murchison is to be closed in June quarter and a placement of A$39M to amongst other things close Murchison (not flagged at the 2013 AGM when told we were OK at A$1,350 for 2 years).

We now see from the 2014 Annual report that the SLR Operations Manager (Rob Humphryson) went in April 2014 (termination benefit A$143,256), Chris Banasik (he did the competent persons statements for Murchison) is going on 14/11/14 and Les Davies is going on 19/11/14 - all just before the AGM on 20/11/14. You may recall that Chris Banasik was re-elected as a executive director at the 2013 AGM and the Chairman (Paul Chapman) refused to allow Chris to be questioned on his "role in the Murchison! by insisting it was a board issue. We now have a situation where the Chairman (Paul Chapman) is asking to be re-elected at the 2014 AGM and now announces that Les Davies (announcement of 12/9/14) is coming back as an NED (on A$81,000 + super) without it seems asking Shareholders at the AGM. Currently there are 4 NED's presumably they are saying that there will be 5 after the AGM - all founders after at least 7 years (hows that for independence).

I know which way I will be voting at the AGM about Paul Chapman's re-election as Chairman.