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LSG/RSG/RBK/GGN/SPX

  1. "As the Obotan mine nears exhaustion (due to finish up in December), Resolute has made a few strategic investments in fellow Aussie resources companies which also have promising African assets. During the year Resolute took up major shareholdings in Gallery Gold [ASX:GGN] (11.2 per cent), Spinifex Gold [ASX:SPX] (7.5 per cent) and Red Back Mining [ASX:RBK] (4.5 per cent) at a cost of A$7 million. These juniors have the Mupane, Buckreef/Rwamagaza and Chirano projects in Botswana, Tanzania and Ghana respectively. In addition, Resolute is currently earning 51 per cent in Spinifex's Nyakafuru project.

    It's not out of the question that Resolute might rally the troops at some stage in the short term to consider the potential benefits of a possible four-way merger with a view to becoming a substantial perhaps 400,000-500,000oz per annum gold player in Africa.

    "The company will continue to examine ways to increase the value of these positions," said Resolute CEO Peter Sullivan.


    The X-Factor in the possible four-way merger will be Lion Selection Group (LSG), which has 55% of Gallery Gold (GGN), 26% of Spinifex (SPX) and 17% of Red Back(RBK).

    There is no doubt that Resolute is seen by Lion Selection as the vehicle of choice for the extraction of maximum value of its Africa assets. Macquarie (who is the only other subst. shareholder) is more interested in a fast buck.

    This story should start to unravel by the end of this year/ beggining of '03. I believe it will start with a takeover bid for RBK by RSG.

    I hold LSG

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