Ann: Exploration Update - Exceptional Intercept, page-175

Agree there is a lot to play out at SPR.

I am puzzled with SL’s positive change in view ie why his view is just so much more positive. Last year when they realised that NN dipped towards 4P he was saying we want to know if NN joints up to 4P - ie he did not have a view that they likely merged at depth just he wanted to know. With more drilling mainly at NN it is clear NN has widened a lot the deeper it goes from about 100m to at least 200m and maybe even 250m but at depth it is still quite a way from 4P but maybe that will change with more deeper drilling at NN ie towards 4P. There has not been much more drilling at 4P, WW and SF in the last 6 months ie nowhere as much additional drilling as at NN to assess if they join up at depth or even to what extent they widen at depth.

If he is now stating all the 4 high grade deposits likely join up at depth without any real evidence then he is either holding back information from the market that he does not believe he can release yet or he is being over confident since there is just no evidence they all join. If he was to say just NN and 4P likely join up I would think that is a reasonable statement from what we know but to say all 4 deposits likely join up sounds very much like over confidence or hyping.

Just think about this - if all the deposits joined at depth and had a high grade similar to NN, with NN having 2,000 OPVM and maybe more then if the joined up deposit may have at a minimum of 10,000 OPVM (as it would be at least a strike length of 1 km) and if that went for 500m at depth that’s 5M Oz itself without including the gold in the areas above where it does not join up - it may be an easy 10m Oz - it would make it a much better deposit than DEG and probably much lower cost (DEG has refractory gold which is more expensive to extract). The grade may approach 5g/t making a 400k Oz producer from the existing plant.

If they all did join up then the method of mining may be quite different to just mining NN by itself. If SL is right then we may find they defer the restart by a few years so they can complete enough drilling while working out the best mining method.

I do think it is likely that 4P, WW and SF widened at depth but we do not know what grade the deposits will be at greater depth as they have not yet drilled deep enough ie they have not drilled as deep as NN but the 2 holes we are waiting on from SF look good.

I like others believe SPR will be taken over but when is anyone’s guess - so far DEG is still independent so maybe SPR will be around for longer than we believe.