Sotiel, page-8

But everyone has been suffering post-Covid cost inflation across the globe, not doubting that Ukraine had an effect on gas and oil prices (and also fertilizer and the precursor for explosives) but the inflationary effects have also come through higher steel prices and cement prices which are a big cost to underground miners. Not to mention labour shortages and rising wages in many countries. Just ask the numerous profitless underground base metal miners in Australia at the moment.

Matsa having a sizeable Zinc content and not being a pure copper play has probably sucked the life out of Matsa and led to a lot of "profitless" production of Zinc that barely pays its way, especially combined with low zinc prices and high underground mining costs, you can only avoid the zinc parts of the orebody so long before it starts to compromise your development schedule and costs.

I think SFR got a great deal and essentially stole the Botswana assets for quite a good price for Motheo, but then possibly overpaid for Matsa in Spain. For that timing, we can thank SFR management who dilly-dallyied for too long as DeGrussa ran out of mine life. They had the right idea with the Botswana acquisition but then painted themselves into a corner with a metal production shortfall resulting in the capital raise and purchase of the assets in Spain. The Money of Mine guys have made the valid point that it's not every day that a company is presented with the opportunity of purchasing a large-scale integrated producing complex of mines like Matsa, in a decent jurisdiction and thats fine, but I would argue that potential acquirers still have to be disciplined in making these big decisions even with China ruled out as competing for assets and few companies with the size and cash to purchase something like Matsa I think that SFR in hindsight would admit that they probably could have driven a harder bargain. If they ever buy again I can also bet that it will be a pure copper play with absolutely no other metals involved like zinc, lead or nickel.

No doubt that DeGrussa was a company making orebody and it made SFR, taking into account the track record of SFR post-DeGrussa and its a bit of a mixed story, thus demonstrating how difficult it is in base metal mining to make a profit and to do good deals.

As a SFR holder, thank god for Botswana and Motheo - if anything ever happened there operationally or politically then it would be for a lot of SFR shareholders.