Hi Elphamale and guys, As I see it there are two distinct...

Hi Elphamale and guys,

As I see it there are two distinct issues:

(1) An on-going failure to maximize operational efficiency and effectiveness of operations on-site in Brazil. Based on, what is now, a long list of announcements this is coming from multiple and changing sources - e.g. weather, infrastructure, issues with scheduling on third party tenements, fleet maintenance, proactive on-site management ahead of potential issues, learning new tasks (SAG mill re-line), having sufficient equipment on site (mining equipment delivery delay).

(2) Timely communication by BDR that issues have arisen.

By far the most important issue to solve is (1). Solve that and then issue (2) is less important as there will be less need to issue announcements, although I acknowledge it's importance for shareholders.

One possible reason for issue (1), IMO is the composition of the Board of Directors of BDR.

Currently the Board consists of:

1 x Lawyer
1 x Accountant
2 x Exploration Managers
1 x Resource Entrepreneur (Peter Bowler)

When reading the bio's of the Board members there is a distinct lack of experience at the pointy end of operating and running a large scale dirt-moving gold mine in a challenging environmental and cultural setting.

The Board would benefit from a re-jig towards one or two people that have done the grunt work in their careers on-site at mines and have learnt the hard lessons of what, why, when, how failures occurs.

Replacing the Chairman (legal background) and only having one exploration focused Director will allow for two operationally focused / experienced Directors to be appointed.

Secondly, despite the performance of BDR over the past 12 months the executive remuneration has increased by nearly $400k p.a. in aggregate.

It is not 2011 any longer and remuneration packages are excessive IMO. An accountant (CFO / Company Secretary) is not worth $709k and neither is a Chairman, collecting $175k and 2 x Non-Executive Directors at +$109k.

We then have 4 x executives that averaged between them earn $664k each p.a.

The argument that "you need to pay market rates to attract the best people" no longer holds water during this unfolding mining bust. High quality people are now available globally, and increasingly so within Australia that represent "the best". The employment market has / is changing and remuneration packages should be reset accordingly.

Sure ... pay people for exceptional performance that ultimately benefits shareholders. In BDR's case this has (and is) not occurring.

The 'wins' for shareholders have, to-date, been largely down to luck - e.g. capitulating BRL, AUD, and input costs such as cyanide and oil. None of this is due to BDR management exceptionalism.

Here is a snapshot from the last AR



At risk of losing my availability to PB I will be communicating this to him in due course.

In terms of sending BDR a message that shareholders are unhappy with BDR's operational performance (within their control) and the disconnect between executive remuneration and company performance the company's AGM is in May (next month).

Shareholders that are unhappy with the state of play should vote down the Remuneration Report (and other motions as appropriate) to send the Board a message that change is needed. The idea is not to roll the Board, but in conjunction with shareholder communication, show BDR management that change is warranted.

Based on the most recent announcement I intend to do this (depending on the actual QR and any forthcoming announcements). I have noticed, however, in the past when I have done this I am often alone (despite HC vitriol) due, to what I assume is shareholder apathy.

Cheers
John