sfr and rni

Entitlement complete. Shares hit the market a few days ago. Mine appeared on my account on Wednesday. Lots of selling yesterday as some of those who took up the entitlement took their profits (on yesterdays price its a 400% gain on the entitlement shares).

Good to see someone in there to soak them up. Most likely Arganaut or associates of Kennedy/Hutton.

Its all good now going forward. We have:
1. A strong focus on the area following SFR's major discovery.
2. Renewed investor interest in the area following OZL's major stake/acquisition in SFR plus strong news flow from SFR (new JORC/new discoveries) which keeps bringing investors in to look at the area including its neighbours.
3. The commencement of work and early news flow from geophysics/mapping etc which started late June.

I think what is less well known is that the ground RNI picked up WAS PREVIOUSLY PART OF ONE OF SFR'S MAIN TWO LICENCES (EL 52/1698) WHICH HOSTS THE DEGRUSSA DISCOVERY. Under the Mining Act (in force prior to the 2006 changes that extended licences to 5 years before dropoff), SFR had 3 years under the original licence before they were required to COMPULSORILY surrender 50% of the ground. WA Mining Tenement Register details state that this occurred on 31 July 2008 (14 of the 28 blocks).

They weren't going to surrender the ground Degrussa was on, so they surrended the ground now held by RNI. Under the Mining Act, SFR could not reapply for the ground for a certain time leading to another party picking up the ground.

Kennedy/Hutton knew exactly who picked it up and after Kennedy was kicked out of SFR for punching the chairman, he went to another company, RNI, and bought the licence off the company that picked up the ground.

In fact if you look through SFR's early announcements on Degrussa prior to the big discovery last year you will see constant mention of the project (called Cow Hole Bore by SFR) that RNI now have.

Importantly for RNI shareholders - the compulsory dropoff of the ground now held by RNI occurred before SFR drilled below the shallow gold mineralisation they had previously found and discovered the thick, bonanza intersections that now comprise the Degrussa and associated discoveries.

Now have a look at page 6 of SFR's announcement from 2007.

http://www.sandfire.com.au/download.cfm?objectID=74CE2612-1AA0-353A-5A8C9F1667E91F50

You can see the prospect Cow Hole Bore, which RNI is now calling the Salmon prospect (see http://www.asx.com.au/asxpdf/20100616/pdf/31qvm4fmnbxbkn.pdf)

Importantly - you can also see a trend that follows from the Highway prospect to East Shed Well to Cow Hole Bore. A lot of SFR's early significant gold results were at East Shed/Highway/Cow Hole (see: http://www.sandfire.com.au/download.cfm?objectID=74DFB584-1AA0-353A-5A1C74B09C8BCCCC). This trend is parallel to the trend hosting Degrussa just to the north.

In short - Myles Kennedy and John Hutton know exactly what is at Salmon/Cow Hole Bore as they oversaw the work there themselves when it was part of SFR's licence. Hence it also explains their confidence in the project, particularly as SFR had to drop it before they made the big discovery last year and therefore before they really understood the geology of the area.

Enjoy the ride fellow shareholders.






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