do they have a strategic plan, page-4

Looking back over the past few months shows some good and bad decisions, I sold down recently to a core holding as a result, feel free to correct me where I'm wrong, my memory is not always the best but this is my take on the last 18 months and how it sets the company up moving forward:

Back in 2008, SRL was actively trying to get rid of it's biggest asset in SARL due (I believe) to the political risk, essentially SARL mentioned in their press releases that the Indonesian forestry department was rife with corruption, if I recall there was also a police raid that stopped mining at Sebuku till they sorted out that SARL were indeed operating within their licensed areas... How these issues were dealt with we'll never know but it seems to have all been resolved, the assets were world class and I think SRL management were shrewd to bring in a local company to take control so they could reduce political risk, retain a partnership in a solid business and use the latent value elsewhere.

More recently management offloaded Whim Creek to VXR, again, they made the best of a bad situation I think, SRL had lost a lot ($45m) with their shocking FX hedges and the mine was only bringing in about $10m profit (FY 2009 Result), as it clearly was no longer a core asset I was disappointed they could not get cold hard cash for the mine, but I'm speculating the terms from buyers were not great or that there were no other buyers, VXR had similar mines in the area and some high grade speculative gold assets in Brazil, to get $11m in shares and a 20% shareholding is a better result than completely writing the assets off (assuming that was the only other option).

The investment in Goldminco is puzzling, without going too deep into Goldminco's announcements the gold grades looked low, but putting good money in after bad is a classic fallacy of management, the board can't write off the loss as a sunk cost and move on thus admitting their poor decision, much like an investor 'dollar cost averaging' a stock that's heading south, but this is a massive guess as I don't know enough about Goldminco.

Finally, SRL management took the income from their sale of coal assets as an opportunity to write down nigh on everything and thus smooth out their earnings, it's the reason I am more positive on the stock as it is the financial equivalent of getting the house back in order.

Moving forward from here I'd like to see the company use their cash flow to buy in to a major 'proven' project that needs capital to mine so they can at least have another core asset, rather than frittering the money away. I'd also like to see an updated analyst report that incorporates more recent events such as the sale of Whim Creek to VXR.

This is all just my opinion, I hold for now to wait and see.