SHP Chart Only, page-163

Happily picked up some more SHP today at 13c support and will continue doing so.

My only concern is a capital raise. But let's talk about it. As of the 31st of March, SHP has ~$10.2m cash remaining (and no debt), having spent ~$4.2m during the quarter (~$3.2m on exploration and evaluation). The current cash balance should see them through to the completion of OHM-01 results (the second drill hole) and the release of the resource upgrade and scoping study in July.

If the management team then acts prudently we should hopefully see them release these scoping study results, allow the share price to move higher and then seek to capital raise on the back of this a few weeks or months later -- ideally at all time highs for the share price (to minimise dilution). A capital raise at that point could subsequently provide the necessary funds to drill asset #2 (and potentially #3 and #4) and commence the PFS/DFS for Ohmgebirge.

A rough rule of thumb is that a DFS costs 1-2% of the estimated CAPEX of the project. On my calcs, I'm therefore projecting a DFS cost for Ohmegebirge of $8-16m AUD.

The beauty of this company is that it has 4 stellar assets over in Germany; Ohmgebirge is just the starter project. If the management team do this well, they could generate enormous wealth for shareholders (and themselves) (although how this situation plays out is far from certain).

I'd like to see the current cash balance used to complete OHM-01 drilling + lab results and used to complete the resource upgrade and scoping study, which has been occurring in parallel to the drilling. These results will draw attention to South Harz, and should reveal some eye-catching NPV and IRR figures, which in turn should take care of the share price.

In my eyes, Dr Gilchrist et. al. need to use this upcoming momentum (from the scoping study) to raise capital at a share price no less than 25-30 cents. With 532M SOI, that equates to a valuation of $133-160m. That will minimise the dilution required (<10% SOI) to unlock the next asset in line (#2: possibly Nohra Elende) and then the process can continue to repeat in a step-wise fashion as we climb a 4-stage ladder.

If the management team acts sensibly (wrt to the necessary capital raises to unlock more value), the market will reward SHP accordingly, and it will be a win win for all: a higher share price, more funds raised with less dilution and the opportunity for South Harz to become a major force in the potash market in Europe.

It's a great management team — I hope they execute the next steps in the best interests of shareholders — it's in their own best interests to do so, to enable their vision to come to life as Western Europe's largest future potash producer.