AGM on 31-5-2018

A disappointing picture this morning at the AGM.  All the motions passed fairly quickly - no real expalanation as to why that needed the extra 10% (taking it to 25%) under ASX rule 7.1 to have a placement without the consent of SH's - they just said it was a "nice to have; just in case"- consequence is that we can all be diluted by 25% without a say so and an opportunity to take part.

The most disappointing aspect was the current situation on Mt Morgan.  It seems:

1. Tony Jones felt that whilst the AISC of ~$860/ozs was acceptable the risks involved (and no doubt built into the Financial report) just did not stack up.  He explained that the the processing plant was complex and that the risks just did not justify the A$85m ($100m with contingency) to raise the required capital and that the capital was unlikely to be forthcoming from financial institutions.
2. If the $100m was to be raiised than a substantial amount (~$40m) would need to raised as equity;at 7c/share this would disastrously dilute the company;they needed to reduce the risk.
3. Norton played complete hard ball and would not talk about any deal that could get the project back on the rails - after the initial 24 hours no response has been received from Norton.  The conjecture was that (for the Chinese) there would be too much loss of face for Norton to compromise and if the project were to go ahead Norton would likely approach someone else.
4.  Whilst the Qld government were prepared provide a grant for Mt Morgan to provide employement in a black spot; Tony was unconvinced that the Qld government were motivated to see the project proceed.  For the Environmental Authority (EA) officials seemed to be thinking up excuses to delay the project and Tony felt that even if they were to proceed with the EA (for delivery mid 2018) then he felt that another hurdle would be invented to do nothing.   No allowance was being made to the environmental clean up and the fact that historically mine at Mt Morgan had taken place (i.e it was being treated as a new mine).  Reading between the lines the "politics" (Greens/labor attitudes to mining) appeared to be governing the agenda, even though the new local (One Nation) MEP appeared to be very supportive (he was evidently very annoyed at the outcome).  No credit was given for the fact that the water in the Dee river was now undrinkable and that the project could (potentially) clean it up.
5. The Chairman felt that CRB's greatest asset was its cash position and now the best position was to look for a viable (i.e less risky) project in a more accepting political domain (e.g. WA)
6. Tony felt that "as a mining engineer' he was not now the correct person to be CEO and what CRB needed was someone with an "exploration" background; he was sorry to leave but now we had to consider CRB to be an explorer with about $3m in cash.  he said he was a big loser from the Mt Morgan outcome but considered that without stakeholder support from Raging Bull/Norton and a supportive "political" agenda from the government the correct outcome was to  abandon the project; he said that he was still open to continue with Mt Morgan if stakeholder (and government) adopted a more positive position.
7. The IP on the mt Morgan work/study if still with CRB and would be worth a lot to any third party who decided to proceed with the project.  In particular the resulted from the testing at the test facility in Perth had been revealing.

All in all we seem to be "at the end of line" on Mt Morgan; it appears to me that the risks (not the $860/oz AISC) and the bureaucratic state government attitude (i.e you do not get into trouble for doing nothing; make a decision and it could be wrong)  have killed a potentially viable project that cleaned up an environmental problem (i.e H2SO4 in the Dee river).