Where does the money go?, page-7

As I see it SLR have both reasonable resources, a good cash position and a good processing plant at Randalls (possibly need to be able to process more dirt though to increase production). Their big problem is a stubbornly high ASIC and a lousy old style management which not only refuses to publicize the company but also happy to stick with old technology (i.e drilling lot of holes without much thought) and not taking responsibility for bad management in the past.

We now have Brian Kennedy (BK) up for election tomorrow - he was one of those responsible for the Murchison fiasco including the 2012/13 loan which forced emergency CR's leading to all our shares being gutted by dilution. As a start BK needs to explain to SH's why they should vote for his re-election when he was one of those responsible for a SP collapse since 2012/13. An issue he needs to explain are why he (as a board member) he sanctioned 12 month contracts with mining contractors at the Murchison where a simple run of a spreadsheet would have told them that the project was not viable at the then current PoG. In 2012 they bet that the PoG was going to go up from ~US$1300/ozs to about US$2,000/oz and froze us into 12 months contracts at that loss making rate; this turned the Murchison from a disaster to a catastrophe - as one of those responsible BK (and also LD) should have fallen on his sword long ago; but he has no shame and still carries on regardless (collecting their NED fees). The other issue is that the took on a debt of 10/12/2012 from NAB ($75m) which they wasted on the Murchison and then had an emergency CR in 27/8/2013 ($47m) followed by SPP for $15m in Sept 2013 to repay this NAB debt but did not let SH's know the terms of the loan; to me BK and LD share liability for this fiasco . and have to go. This was followed by a CR on 28/2/2014 ($39m) to rescue the company from the resulting losses; how bad can a company be managed? those that remain from this fiasco who are still on the on the board (LD and BK) need to fall on their swords and exit with some respect. Each of the directors on the board made about $11m from selling their "founder' options (4m each) and left the rest of us SH's in the lurch; I would love to see BK voted out tomorrow and the company get a "strike" on their rem report (i.e 25% against) which may (just) focus their attention on SH value as another "strike" next year would mean they all go (that's the law). I think the Chairman (David Quinlivan) means well (he was not part of the old board) but needs a bit of an incentive to get rid of the "good ol'boys" who refuse to take responsibilty for the destruction of SH value.

Today I went to the Northern Star (NST) AGM - what a difference? In 2012/13 these two company's were at about the same level. SLR had Daisy and NST had Paulsens - look at where they are now - the difference is good management. NST avoided the disastrous mistakes of SLR's "good ol'boys"; those remaining (LD and BK) need to fall on their sword before SLR can recover - they have made a mint why don't they just go!!

Finally NST was talking about how they proved up new resources (and reserves) by using 3D seismics - acorring to Bill Beament the prospects showed up like "a sore thumb" - they just had to go along an drill them; why don't SLR use these techniques before drilling holes all over the place. SLR needs to demonstrate that it is using technology to get the best bang for the buck - the difference is demonstrated by the targetted success of NST's exploration compared to SLR's - their ground is just a prospective. The other difference is in driving down the AISC by using technology to reduce costs and also the HR techniques they use to incentivize their work forces - it's all down to management; the difference is chalk and cheese.