Communication Breakdown

Well there can no doubt that Silver Lake is playing games with its shareholders in my view.

For as far back as I can tell SLR have always released the Reserves and Resources statement in August, yet this year it is late. Technically it is part of the Annual Report which the Corps Act requires to be released no later than 4 months after year end or 21 days before the AGM.

This doesn’t bode well for the company to convert its considerable resource base of 6 million ounces into more reserves. Take Daisy for example it has only 105, 000 ounces of reserves despite having a resource of over a million ounces with a grade of 13g/t – surely they can convert more than 10% of that into reserves given the stopping and capex already invested into Daisy. They converted a lot more of Deflector into reserves with a similar resource.

Regardless of what the compliance obligations it is just another example of sloppy management communication that has occurred in the last 12 months in particular.

This includes:

1) No exploration results released in 12 months (the one exception to this were the Daisy results released in the March quarterly which should have had their own stand-alone announcement in my view)

2) No presentations – even at the Diggers and Dealers and it looks like they aren’t presenting at Denver Gold Forum this year either. It’s only online so how hard can that be.

3) A late Reserves and resources statement. (by standards of years past)

4) A failure to properly communicate their plans for the 2^nd half of this financial year.

I actually think it’s the last point where SLR are in breach of their reporting obligations. Last year they paid $60 million in wages relating to open pit operations and they have $70 million in lease obligations for equipment. The Company recognised $27.3 million of lease liability repayments, $28.1 million of depreciation charges and $2.7 million of interest costs in relation to these leases.

Given the company has stated that the open pit at Tank South will be completed by the 2^nd Quarter they need to come clean on what they are doing in regards to their staff and equipment which is only a few months away. Presumably they aren't going to pack up and go home so their plans must be well known by now and they should release these details to the market.

I’m lodging a complaint with ASIC about SLR management failing to comply with its reporting obligations. I suggest others do to.

It’s also worth pointing out that ASX Listing rule 5.7 requires all companies report exploration results in relation to a material mining project.

Given SLR has less than 4 years of reserves (don’t know why – see above re Daisy) I would have thought all drilling results are material. Until such time as reserves exceed 8 years of production or they start paying dividends its hard to argue any exploration results aren’t material.

Bellevue (BGL) is doing a cap raising today. Once complete it will have an Enterprise value of over $1 billion, larger than SLR’s despite having half the reserves and resources and the construction and start up risk of the mine.

Just goes to show how bad SLR’s communication is.

GLTA/IMHO