A Turning Point, page-2

Thanks Scoundrel, it's an interesting read.

I'm not sure about turning point but perhaps it's bottomed out. Or should I say hopefully? The big issue is the overhang of stock. Without a dramatic surge in demand it seems to me that the projection of 12 months to clear it all might be ambitious. During this time STA will be best served by demonstrating that we can produce at a cost that is safely beneath worst case scenarios because there is currently a significant pipeline of projects building up. In the next few years if there's capital coming in to the market it could be spoiled for choice and thus will be most interested in the lower cost production options. In addition, there may be a wave of consolidation too which will also see the small guys with the cheapest production costs getting better interest.

The economic case for Coburn is solid enough based on the Feasibility studies but it's a relatively costly plant to get up and running which has been the big hurdle. The Tanzanian assets may prove to be simpler and even cheaper to get going if they should reflect the economics at Base Resources Kwale project at all. (It is likely a different style of deposit than most we'll find in Tanzania based on the the geology we've had so far).

Our price is currently suffering some selling, perhaps from the 30% of non escrowed Strandline shareholders? However I have optimism for the year ahead with all the activity and have bought more in the last couple of days. Between the different projects we have I can make a case to myself for a valuation on the company in the $30-50 million market cap range in the next year or so. That would be roughly 5-8 cents on current structure and a good return from here.