Ann: Production Update Q4 June 2017, page-7

A couple of factors mean the share price hasn’t kept rising:

- Good performance is now expected so guidance upgrades don’t have the same effect they once did.

- There is a perception that SBM will eventually reach a point where Gwalia costs escalate markedly. One of the posters here described this as an ‘event horizon’ previously. Gwalia is an extremely deep operation but the company has shown an ability to keep making efficiency gains that offset the increased costs from going deeper (deepest trucking mine in the world). The new capital investment program again will also allow for some operating cost savings.

- Simberi is a fairly low quality asset with limited oxide mine life. It has about 4 years of reserves (I thought the remaining mine life is less than this). The company has again shown incremental improvement at Simberi though.

- Also, at the highs mid last year US$ gold was well north of $1300 and the sentiment in the gold mining sector was at a five year high. It's come off in price and sentiment since.