the big drums are starting up for smm, page-32

It may be worthwhile to have a quick look at the coming SMM/PDN courtcase.

Should SMM win, then the court may decide that SMM pay that amount of cash to RSG (Resolute Mining) as on 11 July 2006, the RSG Announcement date of the takeover by Paladin of RSG's asset in Vahalla Uranium which was 100 mill shares.

The takeover was IPN share for 3.16 Vahalla shares or 31.645 mill PDN shares were issued. At that time PDN shares were $4.39, so the total sale was for about A$139 mill. in PDN paper.

RSG divulged in their Sept quarterly that the market value of the sale was was A$150 mill.

SMM could perhaps also claim for some damages incurred because of the RSG sale to PDN; this could include all solicitor and other costs. But let us ignore this.

So, if SMM won, they would have to pay say A$140 mill to RSG. For this they get 50 mill lbs Uranium as well any increase in drilling of those deposits since 11 July 2006. I would estimate these at 15 mill lbs. So the previous RSG holding would now be 65 mill lbs at a cost of A$140 mill. or per lb of U: 140/65= AUS$2.15/lb or US$1.68/lb only. But they may pay less.

Compare that with the current US$85/lb and then SMM could get that resource very cheap indeed!

If SMM won that court case, then expect a considerable share price rise IMHO, another good reason not to sell SMM at the moment, IMHO.

Subject to audit,

Gerry
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