Ann: Appendix 3B, page-29

I've just done some rough number crunching. My figures are likely fairly rubbery but if I've used the right formulae and the right inputs they should give some idea of what is being discussed here. I'm more than happy if someone shoots down my calculations.

The first thing to point out is that the directors received for no cash outlay 3,806,394 SVY shares which at a market value as at 25 Oct 18 of about 29 cents means that they received shares for no cash outlay to the value of about $1.1m. The 9,587,500 oppies that were exercised had an exercise price of 19 cents and were due to expire on 31 Dec 18.

The ability for directors to choose to use the cashless exercise mechanism is contained in the company's explanatory statement which I tracked down to the 2015 AGM papers. The formula to use is (number of available options x the difference between the market price and the exercise price) / the market price). So say the number of available options = 9,587,500, the relevant market price = $0.3151, and the exercise price = $0.19 then that would give 3,806,399 shares which is close enough to what the Stavely directors got (which was 3,806,394 shares).

The method of calculating the market price is as provided in the Appendix 3B and in the explanatory statement which is the volume weighted average price (VWAP) for the 5 trading days prior to the exercise date (the exercise date is 25 Oct 18 so the five previous trading days are from 18 Oct 18 to 24 Oct 18 inclusive). In my calculation I just used the daily closing prices and the daily volumes rather than the VWAP as I don't have access to historical VWAPs for Stavely and clearly my way is not an accurate proxy for the VWP so this is one spot where my figures could be off.

To show how far off my figures are my fill-in figure for  the VWAP for the five trading days prior to the exercise date is $0.3156 whereas the VWAP used in the calculation was about $0.3151 - the difference results in an error of about 9,000 shares.

So what effect would there have been if Stavely directors had exercised the options a few days earlier? Using the exercise date of 19 Oct 18 and using the daily closing prices and daily volumes for the 12 Oct 18 to the 18 Oct 18 my rough approximation of the VWAP is $0.2860. Using that figure I get that the directors would have received for no cash outlay 3,216067 shares which is 600,892 fewer shares than if the exercise date was 25 Oct 18 (using my rough approximation of the VWAP). Given the market price on the exercise date, 19 Oct 18, was about 30 cents that, by my back of a coaster estimates, is about $180,000 less in shares. But I repeat, I would really appreciate if someone could run the figures themselves as I have not much confidence that my figures are right.

There are many reasons why the share price and volume spiked after the 19 Oct but before the 25 Oct. In terms of hc though one thing is of note. On 20 Oct 18 which was a Saturday Savannah Jackson started posting on the SVY threads, introducing herself as having interviewed Chris Cairns previously and announcing that she was going to interview him again the next day, Sun 21 Oct 18. On 21 Oct 18 Ms Jackson posted a link to that day's interview of Chris Cairns on hc, And in that interview Chris Cairns (at about the 21 minute mark) said that "my gut feeling" is that between now and Christmas is a "critical period" with regards drilling progress at Thursday's Gossan. The following day, Mon 22 Oct 18, the share price spiked from 30 cents and a volume of 113,420 on the previous trading day to 32.5 cents with a volume of 476,213 shares traded. Again, I don't know why the activity on SVY spiked the way it did and I have no way of linking the interview of Chris Cairns with the price and volume spike the next day but I think the chronology is correct.

I also take at face value the statements by Ms Jackson that she was not involved in any scheme to pump SVY shares, and, having followed Chris Cairns during his stint at Integra a decade or so ago, I have no reason to doubt that he is not a straight shooter and was not intentionally pumping the stock. Rather, I suspect that the directors reacted serendipitously to the price and volume spike - the oppies were due to expire in less than a couple of months - but were not proactively pumping the stock.

What it does say to me, though, is that the directors were of the view that it is more likely than not that the price and volume spike seen on the 22 and 23 Oct will not be bettered in the lead up to Christmas (otherwise they could have held back at least some of their oppies and exercised them later in the "critical period" leading up to Christmas that Chris Cairns referred to in the interview of 21 Oct 18).