Ann: Ceasing to be a substantial holder, page-93

Hello Copper bull and other fellow PEX holders. As we are all aware - PEX are in a pretty good position at the moment with continuing exploration success.

Like a lot of you - I am wondering what Bob Vassie and SBM are actually doing in this space, there is no doubt that Vassie and the rest of the SBM management team know there stuff, but its interesting to wonder whether Vassie and the other SBM guys originally got into PEX maybe for the gold and silver exposure, and have accidently ended up with an already profitable investment in what looks like a company with some very prospective base metal projects? The question then becomes as to what is their exit strategy? By helping build and fund a base metal mine in Cobar or doing some corporate transaction that returns $$ to SBM shareholders?

It could be that Vassie and SBM just like to make money for SBM holders and are agnostic about the base metal or gold potential that PEX have, they just saw an undervalued asset (PEX) and saw growth potential. The other thing to consider is that Vassie and SBM want to have as many options as possible on the table as SBM depletes existing resources and sits on a large pile of money, they want to be able to grow "organically" in the traditional way by self funding exploration and finding good ore bodies and developing them (which can take a long time) but they also want the M&A option - as long as its sensible M&A and dosen't destroy shareholder wealth. Better to be early with your M&A and pick up some bargains before the boom is well and truly underway, because once it is - you have competitors bidding up and inflating the value of exosting projects/assets.

Or it could be more of a deliberate long term strategy to expand into the base metal space by SBM - which would - if true - be an interesting change in strategies as most australian gold miners have typically steered away from base metal projets and opting to stay as "pure" gold plays, maybe with a few notable exceptions such as EVN. This has always been a weird singular focus on maintaining the "gold only" mantra in the last decade - driven by a perception that the market does not like diversified mining houses as some people claim that its "too hard" to justify owning shares in a mining company that has multiple revenue streams from different commodities, despite the blindingly obvious fact that the existing skill sets and expertise in mining/extracting and treating gold orebodies is very similar to all sulphide base metal orebodies so once you have the expertise of finding and mining open pit and underground ore and milling sulphide orebodies then you have that expertise that is transportable to a lot of other orebodies and commodities, why lock that expertise up in a "gold only" silo/mindset ? I guess - we as investors - have been partly guilty of that trend because management of mining companies were only responding to shareholder/investor pressure.

Remember when Australia had numerous mid-sized base metal and gold/silver mining companies? Some of them were very technically proficient and sometimes their diversification even save their butts (for example the Tick Hill gold mine saved MIM, there would be numerous other examples). In the last 20 years a lot of the mid-sized gold and base metal miners have been gobbled up/merged/died and reborn or helped form the international giants such as Barrick, BHP, MMG, Glencore, Newmont, Rio Tinto etc but these guys are now too big and too cumbersome to seize opportunities or react to changes in the market and have self-imposed hurdles that mean they they can only develop or acqire Tier 1 assets too late to the market and always over-budget...

Its possible that in the future we may see the almost idealogical or "blinkered" focus on one particular metal fade, and a more "metal agnostic" attitude return to mining management, where they are prepared to look at each project and the metal contained within and invest in it, if it looks like it will make money, or leave, it if it looks like it won't make money, whether its gold, silver, copper, lead, zinc, nickel, platinum, iron ore, or any of the industrial minerals is irrelevant - the questions that will be asked will be "can we make money out of it?"

Anyway - PEX are set up nicely with presumed interest from Japan, Australia and China (plus possibly others) in commodities that have been down in the dumps for so long that the upcoming price boom will be vey strong (especially Zinc, Lead & Copper), they are in an area that has demonstrated that high grade long life mines can survive and deliver long mine lives and they are in the "exciting" exploration stage where there is lots of blue sky with orebodies open in various directions...