Fat Pat's take on the AGM

Disclaimer :These are MY views, observations and opinions, and should not be taken as authoritive or as advice.

So, just got home from the AGM. I was the only independent punter at the meeting - they invited to to sit at the table.

TL;DR? If everything goes as "hoped" (aka all ducks lined-up and quacking together), we should be shifting dirt in 3-3.5 years time

Anyways, the AGM was pretty normal, though I was surprised that I was the only SH there. They greeted me and I was warmly welcomed, thanks guys. It's good to meet the people that are managing the company.

All the listed resolutions were carried "overwhelmingly" - typically 600+ Million in favour, maybe 4 million opposed. It would appear that the institutions have significant confidence in the boards ability to do the right thing. All pretty vanilla really, and on to the presentations...

Disclaimer 2. I'm no journo, so I can't write/listen at the same time, I may miss a bit. I'll sate "I think" where I am not sure about some point...

Bardin Davis (BD - MD/CEO) discussed how PEK has been going, notable points being;
* Move to 100% ownership of the resource
* SML/Technical due diligence, waiting SML/Govt.approval (still)
* Teeside, land is "ready to go". I think I heard them say that they have agreed to an extension in lease with the local authorities
* PEK has an office in TANZ. I think this is new, but if so surprises me.
* COVID-19 has become a huge driver to de-carbonise the globe (unless you are a US Republican or Aust LNP Member - MY view). Leads to a big push to move to appropriate technologies - and RE's. Potentially huge impact for Nd/Pr consumption
* "Mutually Agreed" position with TANZ Govt. I missed a bit here, but I think it is pretty self-explanatory what they mean by this statement. My view is that they are expecting an announcement on the SML any time - but we are dealing with Africa, so we "Hurry up and wait"!
* PEK "Community Initiatives" to continue - this perked my ears up, and was going to ask that later. I will explain more later.

OK, so that was the end of the formal part of the AGM. Tony Pearson (TP, The Chair) closed the meeting at this point. Not sure what the rules are here, should they have closed the meeting before questions? Does it matter or not? I don't care, but it was a thing at this AGM. As I was the only SH at the meeting, and I had advised I has some questions, they offered the floor to me

1. Q. So, what is the status of the SML, why is it taking so long?
TP - A * Re-iterated that tech Due Diligence has been successfully completed, we really are in the hands of the TANZ Govt.
* Board have confidence that SML will happen "soon" Noted that the current Mine Minister (Miteko?) has been returned, and is across the case. Basically, we wait. It's Africa, we have to deal with it.
* There is an acknowledgement (from whom, not sure - possible the TANZ Govt.), that the 2017 Mining law changes have had a detrimental affect upon Foreign Investment. There's a suggestion that the TANZ Govt. is working to fix this problem.
BD - A * TANZ Govt. are "working hard" to welcome back Foreign Investment. Suggestion here that the TANZ Govt. have acknowledged that they may have shot themselves in the foot with the previous changes (* my view)

2. Q. What have PEK done wrong (if they have?) to delay this process so long?
TP - A * PEK are not aware that they have done anything wrong to compromise the process - it's just an "African thing" (* my opinion)

3. Q. I made this next one a a follow-up to BD's comment about "Community Initiatives", to frame the expectations of PEK as a good community citizen, making them an enabler for good in the town, and how did they expect that to play out - mainly as a reputation linked item (Yes, I mangled this, but they got what I meant)

BD - A * PEK's community initiatives include acknowledging that the mine will be a multi-generational resource, so we are going to be there for a long time...the following help with local schooling - building 4 classrooms, a number (25?) of teacher accomodation buildings, developing at least 2 water bores, becoming engaged with local sporting teams to foster competition and recreation.
* Ngulla clinic has been built by PEK (I think that's what they said)
* PEK is proposing to develop "technical skills" within the community to allow community members to become engaged with the process - though not necessarily guarantee a job for everyone - that would be an unrealistic goal.
* BD noted that we need to invest PEK's time and money carefully, become good "corporate citizens" (my word choice), but note that we should allocate resources appropriately - not be seen as a bribe, but not to spend money if there is no quid pro quo (my words, but that is my take on his words)
TP - A * Endorsed everything that BD discussed

4. Q. Potential Off-Take partners, is there any information. (This one wandered a bit, I didn't get a clear answer, maybe they're being cagey?)

BD - A * The process is moving well, Economic Framework to be developed with TANZ Govt.
* Expect an update to the BFS
* Expect 12 months of work to get "meaningful" results
* The Board is "confident" of a funding solution
* Market for RE's is extremely prospective
* Outlook for PEK's product is extremely prospective
* TANZ Govt. is well regarded internationally - I take that to mean politically and financially
* UK Government is strongly supportive - of "us" or RE's I didn't understand. The UK have a plan to strongly reduce their carbon footprint "substantially" by 2030 (diesel & petrol especially). Driving a push to "electric cars" is a clear indicator that could support an "independent supplier" of RE's into their Automotive production chain - they still make cars, and the whole of Europe is pushing to de-carbonise.
* They noted that they are looking at becoming the "Third Force" for RE's (behind PRC & Lynas, Disclosure, I am a LYC SH), in the same way that FMG produce Iron ore behind BHP & RIO as a "Third Force" in that product.

Commentary, with the PRC being strongly "on the nose" internationally, there is a real opportunity for PEK to get a strong foothold into Europe, producing RE products for all sorts of alternate energy applications - the Europeans are nuts for this technology - even if we are more expensive that the PRC, there could become a very strong "Anyone but China" approach to evolving technologies. I fully support that. the Chinese are very ethical with the business dealings, but extremely unethical when it comes to the way their government bullies a fair bit of the world - and I believe that it will bite them on the bum in the near future.

Commentary 2 : I didn't feel this one to be appropriate, so never asked the question. However, it is a line of discussion that others may wish to follow. China, are they a problem? Could they (or are they already) influencing the political situation in TANZ to our disadvantage?

Some may note the near on 10 year argument that Lynas have had with the Malaysian Government - strongly influenced by the "Chinese" sectors of their community - suggestions that these operatives - including elected members of Parliament - are doing their work on behalf of "Mother China". I do wonder if the TANZ Govt. are clashing the the PRC over the Ngulla mine - what do others think?

Commentary 3. There is a long history of European Countries/Companies exploiting Africa, before buggering off with all the money, leaving behind a big mess. I believe that the TANZ Govt. are doing what their Citizens wish them to do - protect their interestsand ensure that the coutry gets the appropriate amount of benefit from THEIR resources - and that is why the SML has taken so long

At the end I asked - "When do we start digging dirt?" The consensus is that the PEK board are hopefully to see this occur in the 3-3.5 year timeframe "if all goes well"

And that is that (sorry for any missed typos)

Pat