Ann: Results of 2020 General Meeting, page-36

G’day gang.

I thought I would share an email I sent to management this morning.

As @tacair has said and as I believe it was @DaBug who also said it yesterday, don’t be afraid to let management know your thoughts. You are the owners of this company, you have a voice.


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So resolution 1 passed 59% to 41%. This isn’t exactly the biggest or most convincing of margins...so hopefully this vote has sent the message that shareholders do not enjoy unnecessary dilution. We understand that the company needs to raise capital in order to continue operations, but there is a big difference between raising capital with shareholders interests in mind; and selling out to whoever is willing to throw pennies at you, huge discounts, unnecessary dilution etc.

I must admit I lost a bit of confidence in the management of the company after the last CR. Probably the worst thing about it is it reeked of desperation. But as far as I’m concerned CXO is not a desperate company, it is a company to be envied.

I am not sure if you are aware, but at 5.7MT of reserves, this is the exact same starting point (5.7MT) that Taw/A40 had when they made their FID and began construction. So if TAW can do it, there is no reason why CXO can’t do it either. CXO should now be taken just as seriously as TAW was. A part of this process is for CXO to start acting like winners. We are not a desperate little explorer anymore, so we don’t need to make desperate CR’s.

Anyway, myself and I’m sure most other shareholders are hopeful that just because you now have the capacity to raise more shares, you don’t see this as a green light to go on a spending spree with the funds from the recent raise. We also hope not to see a CR like the last one.

Preserving cash is just as much in shareholders interest as is exploration success. Shareholders do not want to see 2 billion shares on issue by the time CXO is mining, as that would mean that shareholders would have been invested in this company for 5-10 years to see a max share price of what? 20 cents if we had 2 billion shares on issue? This would be a very poor and disappointing return on investment for long term loyal shareholders. And this is why shareholders don’t enjoy dilution at the best of times, and absolutely hate it if it is done poorly.

Personally, I am hopeful that our current cash balance can sustain activities for at least the next 12 months. I envision the following:

PRIMARY ACTIVITIES:

• all the off field work (mining studies, environmental studies, offtake, finance etc) necessary to get CXO in the position to mine

• an infill drilling program at Carltons to convert inferred resource into a higher confidence category, resulting in an improved NPV for Carltons which can then feed into the DFS.

• A small campaign at the Possum gold prospect. As we saw with Wednesday’s announcement, the market absolutely loved the gold story. CXO share price quickly jumped nearly 25% and nearly 20 million shares were traded on Wednesday. With gold trading at its highest level in the last 9 years I can see why. SO THE GOLD COULD BE OUR TICKET FOR A MONUMENTAL INCREASE IN SHARE PRICE. It sounds crazy, but should those rock chip samples translate into drill core, then this gold campaign could do more for the short term share price and market cap of the company that what our lithium project has attempted to do over the last 4 years. This could then result in any CR’s being done at much higher prices, much less dilution, the placement capacity stretching a lot further etc.

The possum prospect in the current climate is potentially a tremendous value-adding opportunity. I would love to see CXO take advantage of this and get the drill bit in the ground at possum in the next few months.

That’s it for primary activities. I wouldn't mind if this is all we did for the next 12 months.

SECONDARY ACTIVITIES

• An infill program at Hang Gong to convert resource into higher confidence category

• A small program at BP33 if you feel there is potential for the resource to increase

• A small program at Lees/Lees Booths to test for extensions/ get resource into higher confidence category.

I would be happy to see no testing of new lithium targets. With a 7 year mine life and 5.7MT of reserves (all of which would increase after Carltons infill program), I don’t think we need to burn money on new targets at this stage.

Finally, should new shares be issued as a result of resolution 1 and 2 passing, I feel shareholders would only be accepting/approving of it if the new shares were part of an offtake deal or finance package. As this aligns with everyone’s interest of getting this project up and going.

This project has come a long way over the last few years, and I commend management for turning this company from an explorer into Australia’s next lithium producer. We have nearly made it, so my fingers are crossed that we make the right moves to realise the full value of our projects for both the company and its shareholders.

Regards,