rated spec buy by carmichaels, page-4

re: going cheap. Bringing old goldfields back to life:
Prospect of high-grade lodes lures Synergy to historical Victorian goldfields.
Investment Highlights
�� Farming in to the Glen Wills and Sunnyside goldfields near Omeo in
Victoria: These historical goldfields near Omeo were renowned for highgrades
and rich ore-shoots. SML plan to begin treating mullock, tailings
and remnant ore from Glen Wills in October this year whilst aggressively
exploring for high-grade primary zones.
�� Diamond drilling in search for high-grade lodes: Results to date from
the first four holes have confirmed the geological model for the Maude-
Yellow Girl deposit. All holes returned mineralization, with one hole
intersecting 0.8m at 73 g/t. Given the history of the resource and results so
far have confirmed the geological structures, it is likely that new ore lodes
or depth extensions to known lodes will be intersected as the drilling
continues.
�� Plant construction about to commence: Construction of a 200kt pa gold
treatment plant is to start in May and is expected to be completed by
October. Initial ore will be sourced from extensive mullock dumps and
from tailings. Results from sampling so far show that grades in excess of
10 g/t can be expected from the mullock which should provide sufficient
cash flow to pay for the plant and fund continuing exploration.
�� Establishing a firm base in local community: With the relatively remote
location of the project, SML and Australian Gold Mines NL (JV partner)
are establishing a presence in the area and appear to have community
support for the development of a commercial mining operation.
�� Investment Opinion: Given the prospect of high-grade lodes being
discovered and the likely cash flow derived from processing mullock and
tailings in the short term, we rate SML as a speculative buy with a valuation
range of $0.08-$0.15 per share, with significant exploration upside.