Ann: Quarterly Activities Report - March 2014 , page-12

One needs to remember that it takes time to get the efficiencies from these acquisitions. I would like to point out that I attended the Rising Resources Star RRS luncheon in Melb earlier this month to listen to Bill present himself. A few key points which stood in my mind was the following

1) Both Paulsens and Plutonic produce about the same number of oz i.e. around 100k pa.
2) Paulsens employ around 220 staff whilst Plutonic employ almost double around 420 staff when they took this over from Barrick (Approx Figures)
3) Bill mentioned that he aimed to reduce this number at least closer to 300 however did not indicate whether staffing levels would match the 220 similar to that at Paulsens.
It should be noted that on the same week there was an article in the WA newspaper confirming 120 redundancies at Plutonic i.e. reduction from 420 to 300 staff.
4) Bill mentioned that staff costs when you account for salary and on costs such as fly in fly out can amount to around $200k per person pa so reducing the 120 staff at Plutonic will save NST around 30million pa.

The point I would like to make is that is effectively a reduction of AISC of Plutonic by a massive $300 per ounce. Calculated at 30mill divided by 100,000 oz per annum.

The final point I would like to make is that the March quarterly matched my expectations of a company who has just acquired 3 new mines. I expect in the June Quarterly there will be additional once off costs such as redundancy payouts that need to be paid. As such efficiencies from these acquisitions I expect will be evident more clearly in the September qtr report after the majority of once offs are flushed through the system.