Ann: Trading Halt, page-22

These thoughts are my own, but SH's need to have a good , hard look at this Zim deal. To me it is little wonder the SP has reacted badly to these proposals.
What is being sold here? A group of permits last explored seriously in the sixties, some of which are not even fully held , but which require pegging. I have a serious holding in SI6 (by my standards) and am the last person on earth to knock the stock as I am buried deep, and want the same SP rise as does everyone else. Nonetheless, the descriptions of the vendor assets is discouraging in comparison to the price proposed to be paid for SI6 to acquire 60% or 80% thereof.
I'm not sure how many issued shares we now have, but from memory if we issue the vendors initially 50M plus 10M options, then 1.3 M dollars of second stage shares, and follow up with stage 3 which is open ended pretty much, I think we are paying the vendors about the equivalent of 25 to 30 percent of the company, plus the initial cash payment for the 60 day due diligence of $100,000 (which latter is conditional on prior expenditure by the "vendors" being demonstrated, which cash payment seems fair enough to me). Bear in mind if you will that at (current) SP of 1.3 cents, 1.3M dollars worth is 100 million additional shares, on top of the initial 50M plus oppies.
The stage 3 move for SI6 to reach 80% is based on SI6, having already by then paid for all the exploration work to theoretically prove up a 10M tonne resource, then having to pay another 20% of the market value of the assets to secure the additional 20%.........really??

The following are descriptive of the items to be vended into SI6 which are said to justify the cost being proposed to be paid to the vendors, Mirrorplex etc, including the 34% of Mirrorplex owned by our own SI6 director Joshua Letcher, our very much related vendor....."Recent exploration has been minimal and has involved reconnaissance mapping and rock sampling" - 73 samples by Mirrorplex, so the report states.
"The lithium mineralized area indicated from the historical records are yet to be sampled in the current program.
No exploration drilling has been undertaken in the licences to date which is the planned focus of phase 1 exploration." (Don't forget who is going to be paying for Phase 1, and Phase 2 of course.)
"The first phase may also include geochemical grid sampling the southern portion of the Loch Ness South pegmatite (which Mirrorplex has an option to peg)". An option to peg???

The killer to me is that - for a lightly resourced company with almost 500M. shares already issued after a recent consolidation, on top of all the foregoing - is required to fund all the exploration cost to earn its 60 (and possibly 80) percent of the project, and only then does Mirrorplex have to fund anything. Recall that Rio and others consider only one greenfield prospect in 3000 or more ever becomes a mine.
If some concrete exploration work was already done this might be justifiable....in this case it is not.
There are some follow up requirements for the vendors to push through the regulatory system, but nothing of real note.
Do not lose sight of the fact (despite the BCL disappointments ongoing) SI6 from BML has a big suite of exploration assets and a JORC resource whose in the ground value at present prices is probably 300M US$ plus, irrespective of whether SI6 end up with 40%, 60 or 70% or whatever, after the liquidation of BCL is bedded down. As well as all the exploration costs of the proposed new projects being funded by SI6, and the issue to the vendors of maybe 30% equity in SI6 free, those vendors get the benefit of all SI6's pre earned assets.
It is almost lecherous and all SH need to think this through if we are to keep our skins on, not to mention the 5M. odd C. on H. we hold now. Some may not be happy with this post, but it reflects my view. The permits per se may well be excellent, but the terms are not favourable to SI6, and ought to be redrawn or, if not, be rejected.

Regards to all.