Ann: Exploration Success at Lowlands, page-14

Hi Xenius,

Thank you for your message.

There is some truth behind what you say re: retracement to the placement price, based on the dearth of news, as most of the stocks at this end of the market aren't creating cash flow and are based almost entirely on sentiment. I wouldn't place too much weight on this, though, as there are plenty of examples of companies bucking this trend and going the other way. Just have a look at HEG. Up 70% since their last placement at 10c around a week ago. And don't forget that EAR ran up from the 10c placement (almost straight away) and continued on to 26.5c. They did well to run the SP up and raise at 22c.

Unless you have a copy of the updated share registry and are watching it like a hawk, it is difficult to know who has been selling. I can't see many of those who took the placement at 22c selling it off for a pip or two between 22-26c. As we know, most of the recent selling came via Mick Ruane and also Contango. There may have been a few placement holders at 10c or 16c who took some profits.

I would say that assays are a chance at being announced later this week/early next week, with the reserves upgrade more likely by the end of next week, so plenty of news just around the corner. Now that they are cashed up and aggressively exploring their tenements, we can expect a steady stream of announcements over the next 6 months or so. By then, the 22c placement will be a fading memory. If this plays out the way I expect it to, there will be one more raising before they go into production - most likely a mix of debt/equity financing. After that, they will be able to create some serious free cash flow.

All the best,

Deme

p.s. SOI = shares on issue.