say yes to all, page-75

Hi Roygbiv

I don't read Hotcopper as often as I would like, hence this delayed reply to your post.

You wrote: 'Dont think for one minute if they thought they could get a better price they wouldnt....of course they would....'

I would retort that they COULD get a better price if they had the patience and stomach for some hard work and were not distracted by the other projects in which they are involved.

Riddle me this: why should we accept that the 2 cent offer from LionGold is fair value when SBL's management has repeatedly published charts showing SBL's massive undervaluation on an EV/oz basis relative to peers in recent times, citing the following factors as the basis for the belief that we are undervalued:

a) that many of the companies depicted have smaller resource bases than SBL's JORC-approved 1.47m ounces (with a target of 2.5m through aggressive drilling)
b) that many were a long way off production, unlike SBL which is already producing
c) that SBL has a very rich manganese deposit on its acreage which could potentially hold enormous value in its own right
d) that the cheap acquisition of a crusher (now purchased) could double gold throughput for relatively little cost

All this was released when SBL's SP was DOUBLE what it is now. That's right, only a few months ago, management were telling us the company was seriously undervalued at DOUBLE today's prices. And yes, I know there has been dilution since then, but only because they attempted to raise capital in the midst of a global cataclysm after Fukushima and had to do so at prices well south of the recent trading average. Not releasing info to the market on production costs and gold assays also deprived the SP of oxygen at a time when markets were struggling.

This says to me that they were either misleading shareholders 12 months ago or they are now. The company's value can't have halved in 12 months, especially as it now has incoming cash flow and a plant approaching name-plate production capacity. LionGold certainly sees value here.

It seems to me that management is making shareholders pay for its ineptitude over the past 12 months and now they want to reward themselves for screwing shareholders over. I don't think so!

I find it a bit rich that you can even think of defending Matthew Wood and co. They lured investors in with their promises of burgeoning production, aggressive drilling and the highly prospective acreage we hold and then suddenly it's all too much; they want to walk away.

My guess is they are not prepared to devote the single-minded attention that realizing the potential of this project would require. That's fine too, but we - not them - own the project and we have every right to demand fair value for our shares. Two cents aint it! Their remuneration increase gets a NO from me. And so does LionGold's opportunistic offer.

Gupper