Target price of $3.39 by September 2016, page-3

Gwalia production and cost estimates were based on actual performance for the 2015 year. Given that SBM is a little over six months into their new mining plan, there is the potential for 2016 production to exceed 2015 production and the estimates given. Simberi 2016 production and cost estimates annualized actual June results. Production in the June quarter reached an annual rate of 3.5 Mtpa. Mill capacity at Simberi is about 5 Mtpa, and I would except SBM to start targeting 4 Mtpa sometime in 2016. Oxide reserves at Simberi are about 900,000 oz, which will support mining for several years. Even when the switch is made to sulphide reserves, the grade rises to 2 g/t with most of the stripping already done in mining the oxides. It is possible that mining the sulphides will be more profitable than mining the oxides. The more likely event is that in the future, SBM builds a stand alone sulphide plant and doubles production. As for valuation, each investor must make their own assessment. However, I know of no global mining company with reserves of over 4 million ounces, generating positive cash flow of over $200 million, with debt as low as SBM which has a market cap below $1.5 billion. As for debt levels, net debt is now down to AUS $270 million, which should fall by at least $50 million by Sept 2015. Debt must be assessed relative to cash flow which SBM is generating. I expect that detractors of SBM will continue to bring up the debt issue until SBM has no net debt in 15 to 18 months at which time the stock will be well above $3.00 and these detractors will have missed out on one of the best investment opportunities.