Ann: December 2019 Half Year Report and ASX Appendix 4D, page-96

SD

RMS was a basket case saved by a rising gold price. We both made money there - you much more than me given your big stake there at an early stage. Lets not fool ourselves that RMS was ever or is even now a quality stock. Its a lot closer to what Eshmun viewed it, but I was willing to hang on to $1.30 just to see how things played out. Given that it was, and is, in essence a struggler running on hopium, the drop from 90 cents to 60 cents was not surprising, especially when viewed in the light of its rise from around 4.5 cents at its low.

SBM has had a quality asset in Gwalia but had been mismanaged via the acquisition of ALD and the huge debt and operational/loss from two non-performing pacific island mines. Until recently Gwalia has been a cash cow - very few other mines in Oz can compare to it in recent years, and generated the funds to repay SBM's debt and pay significant dividends.

When did RMS pay dividends?

Shorters know their business better than most, and at present Gwalia is not the high performer it was a few quarters ago. It will never again produce at 260k ounces pa mine, but I think with the higher gold price and around 230k ounces pa it could do very well.

As for SSP, Jetson will be the one taking the case forward to the BOD as to how it should be handled, not Bob Vassie. Vassie has been stringing the market along that Simberi has a future post the oxides, but he will not be there to get the flack if that is not to be the case. Remember he also kept talking about a possible new system for Gwalia that may have resulted in up to 300k ounces pa production, but later decided to go for a safer and lower production GEP. I hope the SSP is profitable, but I have to assume there could be impediments so I am not placing much value on Simberi after the oxides run out.

I suppose its never nice to jump off one horse (RMS) onto another (SBM) only to find that the new nag is not performing to expectations. I have been on and off the SBM nag for years, and bought back in at $2.54 average. I am not in love with SBM - if it looks too sus I will sell at a loss. But at present I want to see how GEP performs - if it works to expectations then I think the share price will head back up, as long as Atlantic also keeps delivering, and the gold price is over AUD2200.

loki