To sell or not to sell, that is the question, page-23

Hi Eshmun,

I think that is going to be a major issue going forward for producers ... as exploration budgets were slashed in the past few years and discoveries are harder to come by, quality exploration and development assets are simply not available.

Brent Cook from Exploration Insights has recently had 4 of his portfolio picks taken over. He and his research partner have stated that there simply aren't the quality assets available any more for M&A in that late stage phase. They are now looking at earlier stage projects as a result.

Likewise, in a recent EVN investor day presentation some time was spent talking about the lack of investable exploration and development projects now. The comment was made that it was getting less likely that deals could be done on a 100% basis and more creative deals such as JV's would be required going forward.

This makes some of the development/ exploration assets that are still left even more valuable and prices for these quality assets will likely increase as the bull market continues (e.g. I would not be surprised if GRY attracts a second offer).

The 'easy' quality production and reserve oz are nearly gone and organic exploration will be required once again to replenish depleted oz. To create scale, EVN was talking about M&A moving to the junior producers that want to move from single mine, c. 100-150k p.a. oz profiles to multi mine c. 400-500k oz p.a. profiles.

Cheers
John