Ann: Investor Presentation - February 2019, page-6

This will rerate big time.

Check out where NST sits on the reserve life. Below all of its Australian peers.

I've been saying that NST is train wreck in the making for a while now. Based on aspirational production guidance NST will need to replace about 850,000ozs of reserves per year. That is just not going to happen on resource to reserve conversion alone. Many of NST mines are UG narrow veined operations which are struggling to maintain the increased production load that the company has achieved from these mines. Much of the resource conversion drilling is being done from UG in already very busy environments where mine access is shared between ore bodies, development activities, ore haulage, paste fill activities and UG resource to reserve conversion drilling. There is no practical way for NST to replace 850,000oz of reserves per year from its own in mines and brown fields tenure IMO even though the resources might be there. They just can drilling at that rate whilst mining IMO.

The easiest thing NST can do to replace reserves is to acquire them. Their share price is at bubble levels so I can see almost with 100% certainty that they will have a tilt at DCN before their train runs off its tracks. If they do and are succesful it will be a very unfortunate event for us shareholders. Even with DCN in the NST stable I think I would take my money and run and shelter in better value plays. A snow ball can keep getting bigger as it rolls down hill but eventually it gains momentum, runs out of control and smashes against forces bigger than its own. You can make money riding the snow ball but you need to be ready for the fall. Esh