Ann: Response to Media Speculation, page-232

There is no delay on a CR - what suggests the company is delaying a CR? Tony has stated a few times in interviews since early July, they are NOT looking at a CR as they have plenty of cash.

If, as they have to date, continue to announce great assays and better ones, then the longer they wait the higher the SP will be and the lower the dilution to existing shareholders. I expect they will release details about visuals from TA 2 and even possibly initial assays before a CR, If the visuals from TA2 look great, they will probably expedite the assays.

While Tony has repeatedly stated they are burning cash of $3m to $4m per month, even at $4m per month they will still have $5 in cash at the end of September. I have consistently stated (see past posts) I expect a CR end of September or into October for at least $100m or an amount to take them through to FID with a possible circa $3 SP. Bell Potter’s recent note suggested a $100m CR. My $3 target CR price is rough but looking more likely given where the SP is and if TA2 announcements are very positive positive it maybe too low. A $100m CR at $3 will only dilute existing SHs by 8.5%. With the potential huge size of the project I won’t be surprised to see a CR of $150m especially if the SP us closer to $4.

The form of the CR will be interesting - it could be a straight rights issue or a placement to institutions and HNW investors including SQM to maintain their 20% plus a SPP for retail investors. Don’t expect much of a discount to the prevailing SP. I doubt Creasy will participate in the CR and no idea about the Germans.

I also anticipate the CR will coincidence with Tony announcing an increase in the number of drill rigs possibly by up to 6 ie total of 12. in a recent interview Tony mentioned assessing more rigs (he mentioned doubling the number) and it was also mentioned in their 5 July Andover Project update announcement. Again I have in past posts suggested they will probably increase drill rigs to 10-12.

My references above to my past posts are at least a month ago and some were in June or May.