Ann: Cannon Gold Project - Finance and Development Term Sheet, page-5

The SAU Cannon project would appear to be a dead ringer to fill spare capacity at Lakewood rather than sell it or go on C&M rather than SAU use the Metal X Jubilee plant. The Jubilee plant is further way and SLR have preemptive rights over the agreement with Metal X. Also with Randalls operating near full 1.2Mt capacity now and SLR potentially being reduced to one mill (loosing the redundancy in processing they trumped so much with the IGR takekover/Murchison) it would be advantageous for SLR to keep Lakewood open using the SAU ore. Also the 2014/15 guidance of 125k - 135k ozs appears to be low for Randalls alone. The gap could be filled with SAU Cannon project ore and SLR's cut go towards the gap there appears to be in guidance. I feel that the position should be 'watch this space", however I am keen that SLR does jump not another fiasco after the Murchison experience. SLR should be careful not to get involved in a "bidding war" and get out of their depth. IMO the market now perceives a "bidding ware" as a possibility given the increase in the SAU SP.