Meeting opportunity with CLA Management on 7th Sep in Sydney, page-26

Here is our meeting summary from last week.
TLDR version is "Very fruitful meeting where the Philippines management have demonstrated that many of the less visible but absolutely critical aspects of getting this project up are being worked on diligently. We are now at the pointy end of seeing this project start to progress forward and by xmas it will be very clear how it is going to play out. As we know MCB is the main game and Opuwo and the old management are merely distractions in my view.

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In Sydney on 6^th September , we met privately for 3.5 hourswith three personnel from CLA

· Peter Hume (Exec Director and Country Manager)

· Sarge Sarmiento (Non-ExecDirector, PH Companies President andDirector).

· AttilenoreManero (Compliance, Permitting, Community Relations , PH Companies Director)

All three are permanently based in the Philippines.

Peter is from Queensland originally andhas livedin the Philippines for 15 years, his work historyshould be well known to all.

Sarge was a standout – We had no idea about his history inthe country and what we mention here is just the very tip of the iceberg. He isa lawyer (Who even studied to be a priest at one stage) with excellentgovernment relationships and has immersedhimself with the Balatoc indigenous cultural community for almost a year.

Attilenore also has history in thisspace, a local director and is looking after securing the social andenvironmental licenses to operate while managing community relations.

MCB Project is the keyfocus, there are other opportunities but let’s keep it tight here

Our focus was not the resource itself(As that is well documented already), but how CLA will get MCB to production,and funding is also just part it.

What became clear is that apart fromthe funding aspects of the project, it feels like CLA is a quiet achiever inthe critical areas that are needed to get this project up and running.

Sarge, Peter and Nene spend timewith the local Balatoc indigenous cultural community and have established anenvironment where the local community is extremely supportive of this project.Unlike other projects in the Philippines that have heavy security presences tocounter local opposition, this project to date has absolutely none due to thenature of the relationships that have been built.

There is a clear structure of howmining royalties and taxes will be distributed to the local province andtogether with other agreements. Such as spending 1.5% of gross revenue on localcommunity projects. Local communities receive share allocations also tied up toperformance milestones aimed at helping advance the MCB project, it’s ineveryone’s interest for it to succeed.

The Provincial Governor and theMunicipal Mayor having jurisdiction over the host community are both verypragmatic and sees this project as the way out of poverty for this people.

Without local community and govtsupport, these projects don’t get off the ground.

How did the Philippinesprojects end up in CLA

This was a Freeport project where extensive exploration work was done since 2006 and accelerated in the last 3years. It was eventually sold off due to them divesting from Asia and also the initial anti-miningstance of the past Dutertegovernment, which ironically turned around later in his last 2 years ofgovernment.

Three related companies in the Philippines were farmed into the CLAshell and the one that owns the MCB project is called Anleck Ltd. UnfortunatelyCLA has such large credibility issues, it’s hard for the market to look throughand understand that it’s not really CLA that’s doing MCB, it’s the local entity,which is a wholly owned subsidiary.

Any future partnerships or debt funding are likely to involve the localentity only.

CLA Leadership

· Aswe know the previous leadership have driven the company into the ground andthankfully nearly all the problem people have gone.

· Giventhe current structure, there are actually two management sub groups

o Australian & Philippine executive directors managing CLA and will be the onesexecuting the projects and getting it over the line. The local community aspectis just so critical to get it there.

o London directors who are running the company listingin London.

Sovereign Risk

It’s worth noting that the new mining agreements moratorium and open pit banwereactually abandoned before the current Marcos government took office, so therisk of a future change of government re-instating this should not be on theradar currently.

Short Term Funding for DFS

We understand that the DFS will costbetween US$4-6M and funding is needed for this.

There are two key options really

· Saleof Opuwo

o CLAworking with Axion Capital in Perth to negotiate an exit

§ From 9 parties, between 2-4 are very interested andaim is to get a term sheet from one in the near future.

o Optionsare for a full sale or spin off with a partner and list a separate entity

· LocalPartner

o Possiblelocal partner may provide a three tranche investment in exchange for 30% of theproject.

o Anylocal partner has to be 60% locally owned and this must be established pre-DFS.

The last raise was to help duallisting onto AIM but this has been delayed. It sounds like this is now plannedfor October(ish), let’s see.

MCB

LongTerm Funding

Current scopingstudy forecast $US253M to get into production, this may improve but as we knowthe world is in a high inflation cycle – let’s see..

There isconfidence that the project could be fully funded locally if all the duckslined up.

Market Confidence in CLA

· CRAP

· Howeverif progress can be demonstrated, CLA will rerate in good time and investorswill be rewarded

· Companyview is that CLA shares are worth between 10-15c

Market Action

Almost everyone trading CLA currentlyare flippers, CLA management see this clearly in the reporting. Very few newholders with most trades being executed by the same people.

Near Term Share PriceCatalysts

September 2022 MOA with TribalCommunity

October 2022 Organizational Update

October 2022 AIM listing – Though might sound a bit optimistic

October 2022 JORC update for MCB

October 2022 Government Declaration of Mining Project Feasibility (DMPF)

November 2022 Application for Mineral Production Sharing Agreement(MPSA)

Q1 2023 DFS with agreed local partner

December 2022-Jan 2023 Grant of MPSA

Mining Permit

The current mining permit expires inNovember 2022 but they have been given a six month extension due to COVID.

ProductionLogistics

· Full production to start in 4thQuarter of 2025

· Holistically not an open cut operation, will beunderground but the first stages of building a stabilized terraced structurewill allow result in some recoveries before underground (infill) starts. Couldsupport first 2 years of mine life, was even suggested it could cover theproject capex.

· Power is abundance with a choice of hydro, geothermalor grid. Small investment to repair some towers depending on the optionselected. Seems to us Hydro/Geothermal would give better ESG credentials to theproject

· No tailings dam needed for project, so one less majorenvironmental and community problem

· Concentrate will be shipped in special containers by truck andunloaded onto bulk carriers

· Portis 120km away but 21km of new road will need to be built by CLA and then thegovernment will take over.

· Goldcontent is high in MCB however not part of the plan to have a separate goldprocessing mill.