Ann: Karouni Operational Update, page-120

Hi Guys,


The management haven't been able to meet shareholders expectations.
Shareholders are absolutely disappointed and that reflects in the share price. Right now there is a 60-80% discount in the share price for management not meeting targets. This is a fact. Now this can change in the future. I believe TRY has gone through extremely difficult conditions in the last 2 years. Its gone from 3 operations to 1. Offloading Casposo, Closing out Brazil and quickly transitioning to Karouni.
Things haven't gone as expected at Karouni so far. The mine is about 1 year old, and I believe all mines have some sorts of problems in the first year or two. I don't know any mine goes on firing all cylinder from day one. Hence, the share price has been punished severely.( As I am a long time shareholder I could be biased but I do believe the price offers deep value for the brave one. There are always significant risk in all kind of investments.)

If one cares to notice carefully, the shares are been bought rather than sold. Some entity has been consistently buying up from frustrated weak hands. On the 15th & 16th Dec, roughly 60 million shares
( including CHI-X) changed hands. Someone have seen value and bought from frustrated people.
I also notice some existing funds have reduced their holding to manage their risk exposure as its not their money. But when the company comes up with positive announcement in future, the same funds will push the share price higher. The incident which happened in Karouni, if happened in other big name companies would have gone unnoticed. But TRY being a one mine operation and coming to the end of the year and definitely not meeting already reduced production guidance had no choice but to report.
Those slippages could cost a million or two to get fixed. Production could be less for another quarter while it is being fixed. The gold is still there and will be extracted sooner or later.
In my short 4-5 years I have seen many companies go through this type of situation.
SBM at 8-15 c in 2014.
RMS at 4-8 c in 2014
SLR at 13-15 c in 2015
MOY at 3-6 c in 2015
BDR at 10-15c in 2015
I was involve in all of them before the bloodbath, during the bloodbath and also after the bloodbath. Although I wasn't able to make the most out of all of them, still they were good returns. I still hold all of them but not as much I used to as I believe none of them are bargains anymore.
They all are doing fantastic now and are priced accordingly.

While every situation is different, some worse than other, but brave people who loaded up where rewarded handsomely. There are many other examples but the one thing common in all of them is they all had problems at that time. This is not a guarantee that TRY will recover but chances are it will.
The whole investing is a probability game.

All the best.

P.S- The team are now on site to assess the situation and also drilling has restarted after the festive holiday period.