Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-4

If you take a look at the last three years of interviews and presentations, Mr Griffin has done a tremendous job of NOT providing a direct 'call to action' for prospective investors.

I consider SFX shareholders extremely fortunate to have had Bruce Griffin leading the company for the last three years. He is very capable, experienced across all the necessary fields, considered and strategic in his approach, and to top it off he appears like a straight shooter.

Based on the above categorisation I have no doubt that his lack of direct promotion of the shares as worthy of investment is not accidental and that he has his reasons for taking this approach.

What I mean by a lack of direct promotion is that the presentations and interviews often focus on things such as: plant design, product specifications, uses of zircon and ilmenite, project within budget window and on time, project completion and shipments expected as forecast, project financing, mineral sands and industry outlook, joint venture and partner strengths, world class deposit in good jurisdiction, generic reference to future growth opportunities such as stage 2 and SA, and so on.

However, what an investor wants to hear is that the company's share price is underestimating these characteristics and that the market capitalisation has room to double, triple or even quadruple when the broader market eventually opens its eyes to the high level of free cash that the project is set to deliver.

A token inclusion of the sorts of thing I'm speaking of is included in some of the presentations or interviews (eg, NPV vs market cap chart, NOV of stage 1 and Stage 2 dividends), however they are never the highlight, not emphasised and the investment relevance drowned by a more general descriptive account.

What works is a direct call to action.
If an investor comes away from a presentation or interview having been told that management feels that the company's shares are anomalously undervalued and there is good reason to justify strong capital growth (upto $1.50 vs $0.45 share price) in the short to medium term and very high dividend yields (relative to current market price) then an investor is going to find it hard not to buy shares - ultimately people love the idea of making money.

The company has been commissioning research reports for the last 4 and more years which all, whichever way the numbers are sliced, come up with valuations close to $2.00 per share (excluding future growth opportunities outside TB). Even when stage 1 only is considered and/or highly conservative assumptions are used such as long term zircon price of ~$1300, still valuations in the range of $1.20 - $1.40 eventuate.

I'm not suggesting that management become indiscriminate share promoters making wild claims that won't be fulfilled, focussed on pumping the share price at all costs. Rather, it could be reasonable for management to reference the research and make comments based on what expert analysts have concluded rather than having no bridge between the presentations and interviews and the research and investment rationale that exists.

As I've said, Mr Griffin is a strategic thinker and would have his reasons for how he has approached the promotion of the company.

Nonetheless, having a market capitalisation which is less than the amount of capital that has been invested to get the project to production (over a more than 10 years of development and risk) does leave shareholders unfairly vulnerable to a hostile bearhug takeover.

Once the significant risk of production performance is behind us Mr Griffin may take a more proactive and bullish approach in placing the value proposition directly in front of prospective shareholders. Maybe the upcoming investor presentation in a few days time will take this approach instead of continuing to leave the value proposition in the background.

Share prices and markets have the ability to factor in milestone risks, when they don't there ends up being a big gap between market capitalisation and project value and eventually comes a big gap up in shareprice over very short time frames, this is not the ideal scenario and at some point considering the shareprice becomes part of management obligation to delivering shareholder value.

There are many compelling reasons why an investor should be looking at SFX shares and a bit of creative focus from management could put together a very compelling call to action for prospective investors.