Ann: Results of Meeting, page-23

Hi All,

I was at at the AGM yesterday, just thought I'd post my observations from it.

From the outset it seemed a little underwhelming, there didn't seem to be much excitement (maybe that was just me, or maybe it was the share price). Vince did mention the current share price action and that it's never nice. In attendance was Daniel Harris, and the rest of the board.

As you know, all resolutions were passed. Once that was over (took about 10 minutes), Vince gave a presentation (the same one he had presented at a previous conference earlier in the week and the same that he will be presenting today.

He made it quite clear that Next High Grade Mine should be front and centre. In talking about mines that will most likely be coming into production, Windimurra near Mt Magnet (2020) and Black Rock over in Canada would be the next two to get into production, and then us (no certainty was given however; he can't give that).

The presentation was quite short and to the point. An interesting point he mentioned was the environmental laws in China, showing us a graph of the price of pent-oxide, he pointed out the last spike in price and the the consequent drop. This was due to the influx of stone coal to produce the required product. However, this time it has changed.

The Chinese EPA is cracking down big time on these sorts of acts, essentially saying if anyone is caught doing these sorts of operations they will be shut down, fined and jailed. In addition, every police officer is now essentially an agent of the Chinese EPA, hence the eyes are on the street so to say.

Vince mentioned environmental permits will take a while as they always do, but could not give a certain time frame on when it would be completed as he mentioned it depends on how the EPA wants to conduct its investigations, hence the ball is in their court.

A question was raised regarding time to get into production, which was met by the response of it depends on the environmental process, but we will have a clearer idea of it in 6 months time (i.e. when the DFS is released).

A question was raised regarding MasterMines and what they are up to at the moment, Vince replied that they are in China at the moment. From what I understand Vince was saying that they were meeting with other potential consumers of vanadium (I was a bit unsure of this part; had the win-win agreement fallen through or were they simply just looking for more partners to find financing with; i.e. keeping their options open).

A question was raised regarding any further capital raising. Vince replied saying that the options will be converted giving us ~$7 million, which will be enough to get us through next year. (personally I would like for the options to not be converted and a capital raising done instead at a higher SP, hence less dilution).

A small discussion was had regarding financing, basically they are not sure on what form this will take (equity, debt or a combination) or with who it will be. However, this was where Daniel chimed in and mentioned that he knew a few people who he believed will definitely be interested in financing the deposit, he also mention he knows almost all the people int he vanadium industry, hence his contribution to the company and being on the board is critical for this deposit taking off and getting into production.

A question was raised regarding the European battery makers. Initially we had an agreement with Gildermiseter, but not too long ago the contract was torn up, this was because they went broke, and since have been bought out by a Canadian company. Vince mentioned that the Chinese will win this game and will be mass producers of this technology in the long run, the only issue they have is supply of vanadium.

After the meeting was over, I spoke to Vince, mentioning that TMT was not mentioned in his presentation. Basically, there is bad blood between the two companies, both he and Daniel were adamant that their PFS was rushed and not enough testing was conducted for it to be robust for a due diligence (basically he posed the question as to why they do not have a partner at the moment). Furthermore I mentioned the fact that they want to truck in gas, an option that Vince believes is not economically viable. I asked if they saw TMT getting into production, Vince said he could not say. (Personally, from my understanding was that TMT was always trying to sell the asset and never planned on getting into production, but this may have changed).

The reasoning for the "bad blood" (in my option) was basically TMT and their attitude towards AVL in regards to getting the PFS out on time.

The recent drilling program will be used to upgrade the project's resource and this will be completed within two weeks, whereby some of the inferred resource will change to indicated and that will feed into the PFS which will be released in early December.

In regards to producing 99.5% purity vs 98% purity flake, I asked if this would increase our OPEX, the answer was no, it will only increase our CAPEX by roughly $15 million, so the idea is to hold off on it and get into production first and then use our cash flow to fund the add on. The same was said about the base metal flotation circuit, that it can wait until production occurs and then we can use our cash flow to add it on later.

All in all, there is still a long way to go basically the next 6 months will be important for us, resource upgrade, PFS, infill drilling, negotiations with off takers, DFS. The reason the PFS is taking so long, is basically Vince wants to be able to bring that document to potential partners and it needs to be able to withstand criticism from each and every angle, if it does, negotiations will be much easier.

That's all I can remember for now.

Best of luck and DYOR