Hi SR!

The Guyana Shield properties were formally controlled by Golden Star Resources, and after spending a lot of money several years ago, they opted not to continue. That may have been a good decision back then given the gold price at the time, but now with gold approaching $1000 it is much more attractive to carry on with exploration work.

SMH has earned some credibility in Guyana and Bending has been active in the country since the 1990s. It should be noted that the Guyana Geological Agency shared the booth with SMH at the PDAC. Bending has strong connections and has shown that he can attract partners and funding in a difficult market. So for the vendor of the Guyana Shield project, SMH appeared to be a very good option for a non-core asset. Rather than sit on the holdings and gain nothing, they get a solid chunk of SMH shares to vend it to us, and a back-end cash payment if the exploration is successful. Thats a pretty good deal considering SMH has already shown some early success at the adjoining Black Banana project.

To say SMH is run on a shoestring may be the wrong expression. I do not want to own shares in a company that is throwing money around like a slush fund. I owned shares of a company called Sennen Resources back in 2003 that pissed away $3 million at the Guyana Shield and only accomplished a couple of drill holes before they ran out of money. Is that the ideal way to run a junior? I would rather see a streamlined operation that is only paying the minimum to keep things going during times when the share price is low and its difficult to rise cash.

I do not think SMH appears weak. It has risen very strongly during the last few months as there is buying support in the market. And again, the partners that are putting money on the line to work with SMH obviously feel the story is solid. If one was just to spend all day listening to retail investors, the picture appears different. Most of what I read on these forums is very bearish, and most people just want an outlet to complain and attack management of these companies. The sector is weak but individual success stories can still be found, however you may not see that if you just read what is posted on forums. What person would commit millions of dollars of funding into a company if they thought it was poorly run? It comes down to the commitment of management to work through the challenges, and that is true in bull markets too. Credit where credit is due, SMH was able to continue on and find alternate means to attract funding and acquire assets while most companies suspended work, and scaled down activity. That is the difference between winners and losers. Any company can look good when the market is speculative and its easy to raise money.

So my point is the consensus opinion on a forum may not represent the true state of affairs. Just because someone questions the financial viability of a company does not mean that in fact the company is insolvent. The people writing the cheques and making significant commitments will be the best indicator of the strength of a company, IMO. Keep in mind my comments are my personal opinion. The facts are the facts and other people may interpret the situation differently. I am a shareholder and have confidence in the way that SMH is moving forward, and that is why I choose to work with the company.

cheers!

Mike Kachanovsky

IR Consultant