Rogue, I'm glad that you don't refute my key points, ie1. SIH...

Rogue, I'm glad that you don't refute my key points, ie

1. SIH development schedule is completely unrealistic and there is no hope they can be in production by end of 2011. Its a case of company SPIN that has no credibility!


2. SIH MUST PAY ALL EXPLORATION COSTS UP FRONT and FUND ALL CAPEX for any development and Antam is FREE CARRIED into production.

SIH only ever get 75% gold production, and are repaid 25% of Capex from production.

SIH in effect takes 100% of exploration and production risk and MIGHT get 75% of revenue of gold produced.

(i.e. terms of the jv are highly skewed in favour of Antam, who take no risk up front but get a guaranteed 25% of any development).

This arrangement is questionable as to whether it could ever be bankable!

Further to your comment that SIH may never realise the extra 1 million ozs (which is your and company SPIN) then that amounts to spending cash for that exploration for no return. Their exploration results to date clearly are very patchy and don't live up to the hype of previous SPIN by SIH.

If you do a DCF ASSUMING a base case of current Inferred gold, then the economics don't stack up, even at current gold price, allowing for realistic CAPEX, ALL of which SIH must contribute up front!

It simply doesn't work, and if you can't get it to BFS with bank debt, then the funding has to come through equity raisings ALONE - that will be a massive blow out in share capital and EPS would be disaster - only investors with their eye off the ball would consider that!

Unless SIH find another major deposit they simply can't make it work, and they are not even trying to find that major deposit!

I believe management have tunnel vision for pursuing the project as it stands.

The lights are on but there's nobody home (don't get caught out being asked to turn off the lights!).