Ann: Presentation - Red 5 and Silver Lake Resources to Merge, page-138

"... to give the new merge-co some mine life and ounces in the future because he didn't invest in SLR's own ground?"

Therein lies the rub. In FY23, Silver Lake's actual exploration spend didn't meet guidance as a significant blow-out occurred in growth capex. By my calculation, growth capex + exploration expenditure was 50% more than guided in the June 2022 quarterly report (mainly increased Deflector costs but generally widespread rises across the board as well, except exploration spend).

Nonetheless, despite the lower exploration spend, significant success was achieved at Mount Monger in FY23 with Daisy reserves at June 30 being the second highest in recent history, and significant open pit / underground reserve/resource growth reported at Mount Belches. Further success was reported in the September '24 quarterly with spectacular underground drilling results at Daisy announced.

In FY24, the exploration budget has been increased substantially - including SW Deflector and Spanish Galleon - as well as Sugar Zone, which we're half way through a major drilling program and don't know the results of yet. Why in this merger of equals, is one company trading near its multiyear low and the other near its multiyear high? As many shareholders have questioned, rather passionately too, is the Silver Lake board acting in shareholders' best interests or is it a quid pro quo for them?

As it stands RED is effectively a 100Koz producer as AISC margins are razor thin for its hedged production and price. Silver Lake's free cash flow will be vastly superior in the near to medium term as RED's hedge book isn't expunged until Q1 FY27. All IMHO, DYOR.