Ann: Annual Report to shareholders, page-2

While there is much to like in this report, there are a couple of things I am very unhappy with;

1. Cost - both monetary and in terms of resources used to produce this Report as it contains nothing new that hasn't been announced already.

It would have taken hundred of man hours to produce and work through with the auditors. While management have done a great job in keeping the direct costs at $55k ( just compare with say KCN, slightly bigger gold explorer at $900k), the indirect costs in terms of man hours are such that our Executive probably spent a month putting it together and it contains nothing of any benefit to shareholders. That time could have been much better spent in value adding activities.

It is entirely a waste time for a micro exploration company based overseas and this is more a comment at ASIC and ASX rather than STM. It is no wonder no-one is currently listing on ASX and the number of delistings far exceeds listings ( Per AFR last week).

2. The senior staff have again received bonuses of 33% of their EC.

Bonuses should go with hitting KPI's and the company having the resources to pay for it. If we had hit paydirt and the SP had risen, I would agree we hit our KPI's, but it didn't and given the latest cap raise, we obviously don't have the money to pay bonuses either.

Given the highly precarious state of the company's finances, latest trying to raise a couple of mil at 0.5c, I would have thought these would have been waived, or at least paid as scrip.

The bonuses are the equivalent of over 10% of the cap raise.

3. Termination payment of $293k to departing Co Secretary Gavin Leicht.

Duffy now has the joint role of company secretary and CEO and so Gavin left on 30 June. The role of company secretary for a micro with 4 directors is pretty light, and Gavin has had it good for a long time, being on an EC of $269k.

To me, giving him a redundancy of $293k in the context of a cap raise of $2.5m - i.e. over 10% of the raise is both an extravagance bordering on a rort and shows a lack of concern by management for company ( and shareholder) finances. If Gavin was on hard times or incapacitated, they could just have kept him on salary.

If Gavin was made redundant as a cost saving measure, then I have to wonder about how paying out $293k as cash is better than paying $270k over the course of a year.

I will vote against the remuneration report due to points 2 and 3 above, given it represents over 20% of the cap raise from institutions.

This is also troubling me in the context of writing a cheque in the next couple of weeks to support the SPP. I expect management to be making every dollar count in this critical time for the company and I'm afraid this is not what is see in the report extract below and as outlined above.



Maybe I'm over-estimating the seriousness of the situation and we have enough aces up our sleeve to justify the above decisions.

I sincerely hope so, but am enough of a realist to think that maybe we don't....

GLTA

Wazz