Ann: Gold Prepayment, page-45

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tooli

1,084 Posts.

30/12/14

20:49

Post #: 14520154
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Originally posted by zog ↑

The issue with SLR management is that they are doing little about fixing their problems. Agreed Chris Banasik has gone (he was the competent person for the Murchison fiasco) but all other directors are still there (apart from Luke Tonkin who joined from Reed Resources in 2013). All are founders (most from 2004) and others from 2007 when SLR got going.

As I see it they are in desperate need of a re-structure (like SBM after a similar fiasco) to demonstrate independence and the market will not take them seriously until (or unless) this happens. The fact that Les Davies retired as MD just prior to AGM and returns next day (without a SH vote) as an NED smells and he is certainly not independent.

To me its clear that the Murchison was a colossal gamble on a high PoG and once they realized they could not afford the $80m Capex over 3 years for the u/g mines (in July 2013) the corollary was that low Head Grade from open pits only was inevitable and that a PoG of over $2000 was required to sustain the project. Any independent board would have closed the project at that stage (i.e July 2013) rather than let it go on until Feb 2014 for a decision with closure not happening until July 2014. The Television doco on fly in fly out miners was revealing in the on this program Chris Banasik said the Murchison project was 6 years in the making and closure would cause problems for contractors and employees. Clearly as director his duty to SH was down the list and the company appears to have been over committed to a project which at that stage their modelling would have indicated was going to be a debacle unless the PoG was $2,000+. The "out of kilter" Sept 2013 Murchison AISC of $1432 is still suspect despite being assured (by the Chairman) that this was an accurate figure.

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Slr obviously needs $10m to stay afloat,no other reason they would do such a deal.How sad a former $1.5billion company now hanging by a thread needing $10m to stay afloat.
What will $10m do? Not much only keep them alive a little longer.The only way they survive is to develope more underground mines and that costs a lot more than $10m.
This company is a total and absolute abismal failure if you invest you are a very game person.There maybe some relief if the POG rises a lot in the next few months but this company is fast running out of cash which suggests the AISC of around $1180 is false.
Good luck.

SLR Price at posting: 19.5¢ Sentiment: None Disclosure: Not Held
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