Ann: Flinders announces intention to de-list from ASX, page-134

Re: the reasons for delisting........

And I'll use a hypothetical here, for points one and two, so as not to offend. Let's imagine I were building a block of apartments. I have the land, and it’s a really good plot. The sort of plot on which I'm never going to lose money, because I bought it at a great price in a great location. It's the sort of plot that regardless of the style or size of development I chose, I'm going to make money. So now I look at building, and addressing the hurdles to completion......

1.Lack of capital support from public markets One of the primary reasons for a company to have an ASX listing is to raise capital from public markets. However, Flinders has historically not received support from public capital markets, with TIO NZ being the primary source of funding for Flinders since 2016. In the past two years, the Company has undertaken three rights issues. TIO NZ has taken up all its rights in each rights issue and provided total funding of $16.4 million (75% of the capital raised). The three recent rights issues have in total had a shortfall of $8.4m or 28% of the total capital sought to be raised. In addition, TIO NZ has provided further liquidity to Flinders via a $2 million loan facility in July 2016 and a $5 million loan facility in November 2017, both of which were repaid through the rights issues.

2. Low levels of trading liquidity There is no liquid market in Flinders’ shares on the ASX. Over the last 12 months only 2.16%2 of the current shares on issue in Flinders have traded. The low liquidity results in limited trading having a disproportionate impact on the Company’s share price.

If this were my development project, and I HADN'T MADE ANYONE AWARE that I planned to build something and hadn't provided any sort of investor presentation in the last few years, and I gave no details as to the quality or location of the land I was going to build on - would it be any surprise if the banks or private investment vehicles did not want to support my project?

3. Concentrated shareholding Assuming full participation in the Unmarketable Parcels Sale Process, the Company will have approximately 3,153 shareholders. Currently, two substantial shareholders, TIO NZ (approximately 55.6%) and OCJ Investment Australia Pty Ltd (and related parties) (approximately 22.6%) own approximately 78.2% of Flinders and approximately 21.8% of the Company is held by minority shareholders, with an average shareholding of 0.0006%. The Board notes that the percentage shareholdings of these two major shareholders are likely to further increase after the Buy-Back as TIO NZ has stated it does not intend to participate in it and OCJ may or may not participate in it. The Board believes the current and likely future level of concentration of shareholdings and shareholder spread is insufficient for an orderly and liquid market.

The above suggests TIO and OCJ should be in some corralled together and the other "paltry" 21.8% minority holders are just a burdensome nuisance. Recent history would suggest, especially in relation to important constitutional change matters, that in fact on one side we have TIO with their 55.6% and then we have minority holders, including OCJ making up almost 45% of the company. The number of holders is irrelevant. The market decides one what earns the right to be liquid and orderly, based on the current position of the company in which they may or may not invest. Without any sort of meaningful release or investor updates/ roadshows, and over negative sentiment, of course liquidity will be low.

4. Costs and administrative burden associated with maintaining the ASX listing Given the points noted above, the Board believes that the costs and administrative burden of remaining listed on ASX outweigh any benefits of a continued listing.

Surely, this is something shareholders should decide, not the board, who have no shares/ personal investment in FMS. We , not the board, are paying somebody $500,000 PER YEAR to work 4 days a week. We aren't sure if he's worth this, but if he can get us to production, he's worth a punt. Let shareholders, the people with skin in the game, decide if WE are happy to cover the costs of remaining on the ASX, as we are paying.

5. De-listing to unlock additional access to funding The Board believes that significant additional sources of funding may be available to the Company as an unlisted entity. The Board believes that Flinders will have greater access to funding in an unlisted environment from groups including private equity and Asian and Middle Eastern investors. These investors may be more attracted to an unlisted vehicle given the 2 Market data as at 12 December 2018. Flinders Mines Limited Page 3 increased structural flexibility, removal of ongoing costs associated with an illiquid listing and reduced administrative burden.

Why doesn't FMS test market sentiment based on all the facts, with Investor Roadshows, and a positive (but accurate) appraisal of the potential of this project. If no investors come on board, then fair enough. But it's got to be a fair go, not glass half empty, hosed down announcements and no attempt to engage new market investment.

6. Future capital requirements of the Company In order to progress the PIOP for the benefit of all shareholders, the next step is for Flinders to undertake a bankable feasibility study (BFS). The current estimate to complete the BFS is approximately $40 to $50 million. The BFS will need to consider a number of potential development risks, and will require analysis of several critical elements being: (i) improving the Fe grade to higher than 60% Fe (as ore grades lower than 60% are attracting significant discounts in overseas markets). This will require both significant changes to the preliminary mine plan and identification of additional higher grade resources; (ii) the development of additional resources to ensure sufficient mine life to support a BFS; (iii) identifying an appropriate infrastructure solution to transport product to port and subsequently to end customers (as with any development stage bulk commodity project, an infrastructure solution is critical to a development decision); and (iv) analysis of mining rates, mining costs, funding options and related requirements. Finally, should the BFS be successfully completed, Flinders believes that the capital required to develop the PIOP will be significantly greater than the funding capacity of the Company under its current structure. For the reasons outlined above, the Directors believe that the Company has greater potential to access funding for these future capital requirements in an unlisted environment.

All projects require risk/ reward analysis, path to market etc etc. There are so many options in relation to what FMS holds at PIOP and Canegrass, and I'm confident that a forward thinking, deal making company like FMG (or similar) would be all over this if they held it. Offtakes, early development of the Vanadium resource to get some cash flow are just too of many options a creative, dynamic company would be well down the path of exploring - rather than crying "too hard". Seriously, if you don't have what it takes, sell out to somebody that does. But no, the message seems to be, this is a risky and expensive venture chaps, and if we're taking the risk, we want all the reward. Well, that's not how ASX listed companies work. Shareholders decide if they want to take the risk, based on the potential reward.
And so we circle back round to the beginning.........