Ann: Response to ASX Query, page-72

This is the first time I've ever heard mention that JRO will try and on-sell the product.

JRO are then becoming a middleman trading house, with no guarantee that the product can be on-sold, or who it can be on-sold to, or at what price.

Excuse my naivety, but wouldn't the on-selling of product require a separate agreement between AJM and JRO (and other companies), one that addressed the risk involved, and addressed the potential consequences or penalties, and more importantly, wouldn't AJM's insurers require additional information and legal documentation regarding the additional processes involved in on-selling, and the effects on payments?

It mentioned 13 JRO bank accounts frozen, but no mention of how many remain open, or how much cash is in them.

I'm actually staggered that a company like AJM can now come out and say effectively, their major off-take partner (probably or potentially) now won't want the product, but "Don't Worry Everyone", they'll just sell it to someone else (somewhere, sometime, somehow). I'm assuming AJM trust JRO, they do have a board member, but it looks like the Chinese government and banks have questions over them.

For instance, does the Chinese regulatory environment permit JRO to operate as an on-seller? Are there additional permits or legislative requirements JRO needs to conform to in order to be an on-seller, and what are the internal tax agreements the Chinese authorities require in regards to on-selling of product? Etc. etc.

This doesn't wash.

My assumptions at the moment are that any money coming into JRO will be frozen (even from on-selling), will also be frozen, for their potential Chinese creditors and debt repayments, so they may not even be permitted to move it off-shore to an AJM account.

And what happens if JRO then says that the company they have forwarded the product to, have had a delay (or are unable) to currently transfer the monies to JRO, so JRO cannot forward them AJM, or there will be significant delays in doing so - what will the insurers say about that, and is this covered in the AJM insurance policy. I wonder!

Thank goodness for Lion Energy, let's hope nothing untoward happens to them.

Gw