Hi guys,This is an extract of an article I just received from my...

Hi guys,

This is an extract of an article I just received from my broker. Looks promising for SBL

SBL has EV/resource of $27 and ranked as one of the cheapest, the average EV/resource is $169.

SMALL GOLDS - CONSOLIDATION STARTS

Investment Highlights

The recent flurry of merger and acquisition activity in the gold sector has come as share price weakness across the sector creates an opportunity for acquirers.

The recent market slowdown has been punctuated by companies seeking to grow thereby allaying liquidity and market capitalisation concerns (i.e. getting bigger to get on investors? screens).

The CQT-CAH ($280m) deal cited this as did yesterday?s FML-CRE ($68m) deal.

? Gold is where the action is. In the smaller market capitalisation space gold has been the third most active sector behind Potash and Copper. Gold equities have underperformed the gold price by circa 30% since April 2011.

? We believe this is only the start of the trend. There are plenty of vulnerable companies on the ASX, particularly with the recent fall in the market.

? We recommend investors focus on companies with:

o An open share register (no blocking stake).

o Good assets (grade, tonnes, low capital requirement).

o Synergies to potential acquirers (location, milling infrastructure, cash flow timing etc).

o A key theme of the recent action has been sub-$300m market capitalisation companies merging to form larger more relevant (market liquidity) entities. So stay in this space.