Ann: RMS: Ramelius makes strategic investment in Spartan Resourc., page-105

I think RMS will not sit and wait very long for t/o out of concern that SPR could have a lot more drilling success in the short run and increase the resource. The RED/SLR merger of equals was based on already functioning operations in both companies with no or little inherent relative upside from potential exploration success expected. SLR could wait until it was ready for the merger, while for RMS there is real possibility of SPR becoming an even more costly acqusition with drill success.

In addition RMS would want to ensure that it can get hold of SPR soonish to map out its own plans for all their Murch assets and ensure that the $110m SPR cashpile (and capex) is used/undertaken in a manner that would suit its needs.

My opiinion is that RMS is now trying to get agreement of the other major shareholders to a takeover price to ensure they can get to 90% snd and fully acquire SPR. The question is what is that share price that would meet that condition and is that price acceptable to RMS? If an acceptable share price can not be reached then RMS could just hang on in the hope of a stuff up while SPR develops the mine or there is a major correction in the goldies that makes SPR attractive to them. In the event that SPR manages to survive as a separate entity with a rising share price then RMS could sell its shares for a profit at some future date.

The other reason for thinking that RMS will try to act sooner rather than later is that their share price is currently under-pinned by the residual production from Edna May (likely to be placed on C&M soon unless a cutback is done) and the 8 quarter revenue sugar hit while the Penny West mine operates. RMS's share price could be under some downside pressure if the market precives them as falling back to being just a one plant mining operaton with production of perhaps 150k ounces or less in the medium term, with a cashpile to distribute waste or on some poor investment.

I have some SPR exposure was acquired after it had already bagged several times and been somewhat de-risked, and I would prefer for SPR to continue as a stand alone company. RMS is likely to offer its over-priced scrip in a t/o deal with perhaps a part cash component. We will need to decide at that time if its worthwhile staying in the enlarged company should the takeover be successful. The merger of RED/SLR outcome suggests that its better for the shareholders of the acquired company to sell out before the merger/takeover is fully implemented, but there may be good reasons why that occurred given SLR's management style.

GLA.

loki