Bottom Is In, page-125

I 'm not going to get sucked into arguing with the ignorant or ideological, it's a no win game. If you aren't knowledgeable enough to tell the difference between VEC and WAF as investments I'm sorry, but it's not my job to educate you. You may do well with VEC, I care not. Investors will do well with WAF I'm confident. The salient point you miss with all this boasting of out-bagging other investments is the risk taken to do so. Even if VEC outperforms WAF that does not prove it was a better risk v reward investment, just that you got lucky.

Risk is in the eye of the beholder of course. It is quantifiable through analysis and historical reference but at the end of the day it's very much a personal opinion. Many don't like WAF's risk profile, where as I think the risk is over discounted. Same with VEC for you obviously. Risk is a crucial variable though, usually under appreciated in my experience. Play it safe types over discount risk to be safe and thus miss thus out on great opportunities, reckless punters under-estimate it and get caught out dazzled only by the upside. A whole lot goes into a persons risk assessment; age, wealth, history, knowledge, personality. Let's at least agree that you like the upside vs risk at VEC more than WAF, we here the opposite.

Personally, I hate taking losses. In the very speculative or risky end of the resource market losses can come quick and hard. Often there is no in between, either the company is successful or they head south into oblivion at a rapid rate. Take CLA as a recent example, went from working on a promising feasibility study for a Namibian copper-cobalt project to suddenly an announcement that the project is being mothballed. Not saying it wasn't foreseeable, but terrible for holders who rode it down during the December market correction only to find out it wasn't the market correction at all, but insiders getting out. Most asx juniors fail, dilute holders into oblivion, crunch the shares, wash rinse and repeat. I hate losing money! The trouble with losing most of your investment in one resource spec is that you have to double it in another just to break even. That mythical 10 bagger you speak of is required to make up for the 9 out of 10 bullshit stories that end up dust. Sure, it can be a hell of a fun ride getting it right on that 10 bagger but geez you gotta kiss a lot of frogs.

WAF is not explorer cheap because it's not an explorer. Ironically, the share price is a whole lot less now than when it was an explorer plaything, that's CR risk for you. The hot money has gone and there is a slow grind in building a mine ahead, which doesn't suit you I understand. But much of the risk is now off the table while the certainly of value and cash flow lies is just ahead. I look for very high probability, lower risk investments that I can stick a lot of money into for a still big return while sleeping at night. If I lose my investment in WAF it will certainly hurt and take some making back, but WAF is de-risked enough to take a big chunk of capital that so many other juniors cannot. VEC is a speculative and risky punt, albeit with much more upside, and sometimes fairy tales come true. Like many others however, I simply chose to move up the food chain.

B2 Gold took over Papillon for US$565M in 2014 at only the PFS stage. The Fekola mine in Mali pumped out 425,000 Oz at an ASIC of US$645 in it's first full year production during 2018. US$278M EBITDA if you like. Cash cost approx US$350/Oz for almost us$400M free cash flow year 1. B2 Gold had to spend money and another 18 months to complete the DFS, then get a US$400M capex mine financed and built, but their investment in Papillon will be paid back in under two years measured against on ASIC costs (1.3 years against free cash flow). They got a bargain, their presentations crow about what a bargain they got because low cost, high grade, high ounce gold deposits make a lot of money. Sanbrado will also make a lot of money.

The Fekola deposit 2015 DFS is a about 2 times bigger than Sanbrado in terms of resource, reserve, 1.75 times annual production, the capex 2x, cash costs and AISC about the same, NPVs 1.5x better, but lower IRR. Overall Fekola is certainly not worth twice as much as Sanbrado, but lets say it's worth 1.75 times for giggles. Discounting the US$565M Fekola valuation by 1.75 times =US$322, then add back the cost for DFS (US$30M) plus cash on hand for capex (US$50) as WAF is well ahead of Papillon at takeover, gives a comparable valuation to WAF of about US$400M (note.Gold price in 2014 was high $1200's and the DFS for both projects were done at $1300/Oz). Similar risk profile jurisdictions bla bla.

WAF will be a highly profitable company, is significantly de-risked, fully funded and part way into the mine build. That $400M WAF valuation btw needs to be converted into AUD because we trade on the ASX, which at AUDUSD 0.71 equals AUD$563M, or $0.65/share. Same as the average of 5 analyst valuations on the WAF website. AUD$563M is only what I calculate is the projects pre-tax free cash flow for the first 2 years after the mine plan update flagged to the market. I have presented one valuation comparison, WAF is cheap on any metric you care to consider. I'm front running the mine build and I wouldn't be surprised if a takeover suitor also front runs the mine build for pretty much a free gold mine after two years cash flow pays for the takeover.

WAF is a low risk play by my standards, which allows me to comfortably swing big. You might be right about VEC, I see a whole lot of risks and question marks, but each to his own. These are not mutually exclusive or competing investments, maybe you should spread your risk and have a bob each way if you have enough funds to spread that far. But please do us a favour and take your ignorance back over to the VEC thread where it will be appreciated.

Thanks in advance.