Battery Giant LG Chem Prepares to Lock In Mineral Supplies (yahoo.com), page-75

Red you make some valid points which I agree with, for example, lack of exploration and the need for further development i.e. along the lines Holmes outlined being required. I would also be amazed given the current circumstances if any SH here thinks Sconi can raise the funds as you say "without help" so I agree with that.

A couple of things I don't agree with however include.

• Your assertion thar LGE are hanging around because it costs nothing - why would they bother? - what would LGE be seeking to achieve by hanging around?

• You suggest LGE's strategy "suits their control the resource model" - this runs against you argument that Sconi doesn't have a viable resource so what is ther for LGE to control i.e. according to your assessment a non viable resourse

• Re you comment the rainfall at Greenvale is an issue - I did a quick google on the average trainfall of New Caledonia where we know QPM is securing ore - the average rainfall for the island is 1700mm/year, Townsville 1143 mm/year, Greenvale where Sconi is located only has an average of 848.6 mm/y - so if QPM and their part shareholder LG are not concerned about 1700 mm/yr I doubt Sconi with 848.6 mm/yr is a concern. I am not sure where Indonesias nickel mines exactly are located but I would guarantee average rainfall there would be well and truly higher than Greenvale.

• There is a symbiotic relationship between LGE/AUZ? A symbiotic relationship implies both parties benefit - ok I accept AUZ is benefiting to a degree (though really what is the current value of the present offtake agreement which hasn't supported funding other than as a stepping stone to further negotiations with LGE) - what is the symbiotic benefit LGE is receiving?

• NAIF left the party - I was not aware NAIF had approved anything to leave.

• "LG will not fund the Sconi project because they in my opinion have reservations about AUZ management" - how did you decide that? They entered into a long term contractual agreement with AUZ and apparently based on the statements by AUZ and not refuted by LGE in words or actions by announcing the cancellation of the offtake agreement they are discussing a collaborative partnership

Re the history of Sconi this link https://neqatlas.s3-ap-southeast-2.amazonaws.com/Chapter+5+SCONI.pdf gives some interesting background.

To quote part of the article:

In 1974 construction and pre-stripping of the Greenvale Ni-Co deposit commenced, including the building of the Greenvale township and
the 225km of railway line to the Yabulu refinery in Townsville. During the ‘Nickel Boom’ between July 1969 to February 1970, world nickel prices rose dramatically. However, the price dropped sharply between 1980 (US$3.4/lb) to 1983 (US$1.60/lb). Mining ceased in 1992 and
ore processing ceased in 1993 (Morrison and Burger, 2019).

........ No mining has been conducted over the Lucknow and Kokomo Ni-Co-Sc deposits.

So the mine was abandoned because the price dropped to USD 1.60 /lb nothing about easy picking gone that I could see in the article - do you have a reference for that? I'm not a geologist but the article seems to indicate to me that the geology supports further mineralisation throughout AUZ's leases which is what the company has stated in the past - I agree only indicative and needs to be proven but the current identified resource is developable.

Clearly we both see AUZ as risky at the moment - the difference is you have written off any hope AUZ will get a deal across the line which will permit AUZ to go mining - you may well be right - at this stage from my perspective I can't accept some of the logic / assumptions you base your conclusions on, but we all have differing life experiences and qualifications which we base our investment decisions on.

Flemington was what initially attracted me to AUZ which they have essentially ignored in favour of Sconi. Post SKI I was sitting on about a 350% return - I realised on some shares but in hindsight not enough - I stayed in with my remaining holding for what I thought were valid reasons at the time which clearly given the current SP was the wrong call.

I don't think AUZ will go into liquidation if LGE exits they have sufficient cash to go on for a while - I do think they need to pivot away from Sconi in that event and use what funds they have on other projects to see if they can value add there.

Probably the main current/short term difference between our assessments is the motivation of LGE - as you have stated you believe LGE are still engaged as it costs them nothing and it lets them control the resource - in response I ask to what end? - Against this I would suggest inevitably if Holmes can't do a deal with LGE AUZ will walk away as there is clearly no value to AUZ in the current offtake. If for no other reason than this there is not even a short term advantage to LGE by entering into what inevitably will be a very short term position with AUZ if nothing is negotiated soon - so on the basis of this logic LGE would only have entered into the current discussions in good faith.

The reality is neither of us is privy to LGE's motivation or strategy in respect to the current negotiations with AUZ - all we can do is look on from the outside and draw our own conclusions - but isn't that the case with any investment decisions we make.