Ann: Presentation - November 2021, page-7

Hi Blister,

People are selling as they worried about potential CR. Refer to page 7 they need $4.6m to complete construction of Gingin and now only got about $2.3m cash at bank and $1.5m receivable.

However this latest presentation was only a copy and paste job and its intended audience is the potential financier. It literally stated on the 1st page that the largest shareholder will fund the shortfall and working capital till a new lender coming on board to get rid off Remagen @ 14% interest.


M8S is able to approach any of the big 4 bank and apply for Government backed (80%) Business Recovery Loan at 2.6% interest.

https://www.commbank.com.au/latest/coronavirus/business-support.html

I mentioned on HC before, any banker worth their weight in salt will be able to do the loan after 3 months of Gingin operation i.e. May - June 2022. With BBSY close to 0.1% all up interest rate should be less than 2% for this type of business.

If they start the refinance process now they need to prep triple forecasts (cash flow, P&l and Balance Sheet) and its a complex process and need to address some existing issues such as working capital involved with pivot to metal recycling** and explain how Maddington failed to reach its nameplate capacity of 500k tonnes per year.

** The costs to process scrap metal are high as is the working capital required to buy and accumulate scrap metal into salable parcels – you require equipments such as a shredder or hammer mill, a mobile shear and eddy current system (ECS) to separate non ferrous from ferrous metal, a container tilter, a container lifting forklift.

Presentation quality was also low, this below should read Q1'22 or Q3'21 instead of Q1'21, right?




However all said and done with current MC of $9.9m @0.019 per share is 18% of the Gingin freehold going concern value ($56m) or 50% of Gingin's book value $20.8m.

This is my defensive play in micro cap and it's inflation proof. Worst case scenario sell Gingin to one of the majors with 40% discount, say $33.6m then pay out all existing liabilities, call it $20m mirroring Gingin book value. We are left with $13.6m + existing equity of $9.9m, that is $23.5m net asset with a profitable operation in Maddington. Hell sell the whole company and we can divvy up the proceed. I have been buying from 0.021 to 0.031, average around 0.025 and I am not selling.