AGM - Questions, page-11

I attended the AGM, directors in attendance Scott, Barnaby, Eric & **. A few shareholders and then auditors BDO. Ran through the formalities and got to asking a few questions all of which the board were happy to answer.



So a few points to take away;



Current valuation

-The board believe the company is severely undervalued at the moment, putting it down to market sentiment and getting the Invictus story out there

-Obviously placement flippers are gone

-Will the current valuation affect the farm out process? the board do not believe so, they intend to do their best to create competitive pressure in the farm out process

-No need to raise funds as Scott has previously mentioned, fully funded to farm out

-Scott is the only full time staff member, the team is running a very tight ship in terms of expenses (as shown in the quarterly cash flow reports). Something many other juniors aren’t doing



Processing data

-All data should be re-processed by the end of Q1 2019 with estimates

-The upper Angwa alone is 90% of Woodsides Pluto gas field, with all targets in that one stacked system it should eclipse pluto quite easily

-Management didn’t give anything away but said they have some promising data coming through in regard to other targets not previously mentioned

-Board see no need to invest in 3D data (the farm out partner may want to undertake this), they see this as an easily identifiable onshore target, discoveries in



Farm out

-Farm out process will formally begin when all the data is on the table, this gives Invictus the best leverage to strike a very favourable deal. The actual time to farm out will depend on who is coming to the table

-Hope would be to retain 40-50% but dependent on what is on offer

-Scott made it very clear there is a lack of exploration globally, this will certainly help Invictus, if things prove up well Invictus will be in a very strong position

-Considerable interest from Africa Oil Week with several parties astonished at the size of the Mzarabani prospect (just the upper Angwa alone)

-Management would like to create competitive pressure between interested parties and get the best long term deal



Zimbabwe

-Current government (and opposition) obviously very positive towards the project, elected for a term of 5 years in only August this year

-Environmental permit that the in-country manager Brent Barber is taking care of allows for drilling to be completed. No further permit to break ground will be needed

-Minimal red tape as board have been working on everything in the background

-Management commented on how smooth everything has gone in country, much easier doing business and getting approvals than many other places in Australia

-The actual basin needs does not require the relocation of people, it’s not a national park or anything of the sort. It is literally ready to be drilled as soon as the farm out process is complete (obviously dependant on rig availability)

-Great infrastructure currently in place with sealed roads to the basin

-5 year tax holiday, 15% corporate tax rate with royalties making it very attractive to do business



Points of interest

-Scott is off to the UK today to meet with parties who touched base with him at Africa Oil Week

-The condensate alone has a valuation of around $12 billion (yes that’s with a B)

-The president of Zimbabwe has indicated that exporting would be favourable outcome if a discovery is made, this will help with foreign currency coming into the country

-The 20% in country stake holders have close ties to the government and allow for ease of business

-Invictus could potentially look at increase land acreage, potentially in Zimbabwe or elsewhere



When asked “if a takeover offer came in at say 20c, would you take it?” it was clear that management realise opportunities like this don’t come along very often (if ever) and would not be selling themselves out cheap when they could take it much further.



Overall a very quietly confident and receptive board who are waiting for the story to play out. A busy 18 months ahead, but all the right ingredients to see a large re-rate. Personally very happy with my position, great team and very well lead by Scott.