Sprott Talking Today 14th., page-9

Dear Fatoomch,

The $12M corporate tax is paid once a year. That means in this quarter, the September quarter and the December quarter, the profit for the quarter will be $12M higher all things being equal. By the end of the calendar year, the debt could reasonably be expected to be nearly half of the current value.

Decent drilling results unlocks value. You again mention the idea that the company is going nowhere, you state, “EMR are running fast to stand still…” This is utter silliness and if true completely undermines your ‘Buy’ sentiment. If the company is merely treading water as you claim, then full mine depletion will smack you right in the face after the company has produced 1Moz. Hence the need to find more ounces!

Isn’t your investment thesis by year end that the company will have a mine life extension at Okvau and a sizeable resource in WA, and have only about $36M in borrowings? Also, a market capitalisation of over $1B. Not bad after 2 years of mine operation! You don’t understand value creation of a mining company.

Why does Sprott need to mention tapping into a further line of credit? Everyone knows the company can either fund a new mine through debt or equity. The company doesn’t have $150M in cash to fund it that way, so the company can borrow the money or use a mixture of debt and equity. Even a cursory glance at company announcements reveals the Sprott acquisition/development facility. The company may not even utilise the Sprott facility but another lender, who knows? If there’s a SPP to use a mixture of debt and debt, I will participate.

Part of your homework might be to look up other WA gold producers to see their AISC. The beauty of low cost Cambodia is the ability to average down the WA cost. For example USD$800oz in Cambodia combined with say AUD$1,500oz in WA. At current gold prices you’d be happy, no, or would the $100M borrowing needed to fund WA scare you off?

I trust management to best know and pick the right path as I am aligned with them, and they have more money on the line. They have proven themselves!