Ann: Investor Update Presentation - January 2019, page-8

You have to realize that the SLR mill at Randalls is throughput constrained (i.e you can't get any more dirt through it - it's at capacity right now).  The only for SLR to increase production is to increase the head grade; recovery is now a commendable 95% (so little more to be gained in this area).  Discussions with SLR indicate that whilst they may be able to tinker with the capacity of Randalls a bit nothing dramatic is going to happen in the medium term (it's not the best use of capex).  Consequently increasing reserves with have no affect on throughput (and hence revenue) only higher grades could impact this (thus Daisy North is of relevance).  Taking over BRB also would not help (they do not have a processing plant) it would only increase resources (and down the line reserves); the SLR mill is also too far away to make processing at Randals economic.

DRM is a different proposition it has a plant at Deflector built by GRE and currently producing gold economically.  Looking at the DRM latest production figures recovery is now 88.9% (but the availability was on 88.4%) but of that only 74% of the gross gold is extracted by the gravity circuit (i.e 26% of 74% (i.e 65%) the balance is in the copper concentrate (where the value of this gold is reduced - the concentrate buyer gets a margin and can only extract part of this gold).  It would appear to me that once the merger is through we are far better to invest in a CIL circuit (and additional grinding) to recover the gold currently going to the concentrate and get the recoveries up to the Randalls levels (i.e 95%) thus increasing gold production (without mining more ore).  Deflector grades are currently 4.4 g/ton which is good.  The DRM quarterly put out yesterday says (page 5):

"A mineralogy and deportment review of the gold and copper contained in the coarser tailings fraction i.e. not currently being recovered via existing processing methods, has been received. A typical 0.4g/t Au tailings sample was further concentrated in the laboratory to a grade of approximately 7g/t Au for analysis, with the majority of the gold particles observed hosted in pyrite indicating they may be liberated with further grinding. These results, as well those of spiral gravity concentration of intermediate and final tails streams from the flotation plant (as a substitute for cleaner-stage flotation) will be assessed for economic merit and guide the overall recovery improvement project."

It would seem that all parties would benefit (after the merger) by some capex (from the SLR war chest) to improve recovery at Deflector thus both increasing production and reducing AISC for the joint SLR/DRM entity.