BEZ REVIEW, page-608

If you seriously and objectively wanna talk about risk, you must also talk about reward.

What is the risk of Besra not going into production versus what is the reward of Besra going into production?

More accurately what is the probability of a failure for BAU project (not being able to move to production) and if such a case happens what is the loss on shareholders's investment from here? Sp drop 10%? or 20%? or 50%? or sp at 9c (10% drop), or 8c (20% drop) or 5c (50% drop).

On the reward side: what is the probablity of Bau successfully moving into production? And what is the reward? What is the expected MC at production? $1bil, $1.5bil? or $2bil? Sp at these MCs? $2, $3? or $4? (assuming SOI will be at 500mil shares).

Probability: based on current facts and status of the affairs, my perception of failure at current moment is 10% and success rate of 90%. Why? It is because:

- Quantum is currently a 30% shareholder.
- Quantum already signed binding contract for 372580oz at dirt cheap price of USD $1710/oz (USD $1900 - 10% discount). This quantity of 372580oz is already sitting on potential of AUD $980mil - AUD $1.25bil if gold price will be at USD $3500 - $4000 in 2028-2030 when Besra delivers that contracted gold quantity to Quantum over that first 3 years of production.
- Given new gold price at record price and still increasing, the total USD $300mil pre-payment package if fully paid by Quantum will likely be enough to cover 2.3mil oz to 2.4mil oz versus the original plan of 3mil oz. This means Besra will likely be able to lock in 1 or 2 more off-take customers for that "bonus" 600k oz - 700k oz thanks to the new high gold prices now and likely continues to be higher in the years ahead.

- Given the pre-payment deal was structured in such a smart way that give Quantum the right to lock in price NOW with 10% discount rather than a typical normal off-take that give the customer a 10% at spot price IN THE FUTURE AT THE TIME OF DELIVERIES, the deal is so good for Quantum that I believe Quantum can easily bring in a partner to help co-finance the pre-payment deal at any time if Quantum chooses to do so. I have explained about this deal structure and the compelling benefit of the deal to the off-taker before and so no need to explain again here. All I can say is this deal of USD $300mil pre-payment sum if fully piad by Quantum will bring AUD $7bil to $10bil benefit to it. It is f..king ginormous reward to Quantum and its partner.

That is why I give it a 10% failure rate and a 90% success rate. As it stands, there is no way in the world that Quantum would not want to keep funding the deal and see this project in production for it to reap the ward. Yet i may have some funding issue as it appears to be so but Quantum will overcome it and solve it and back at the payment schedule to Besra again, probably with more intensity.

I leave that to each investor to make their own risk-reward analysis for themselves.

Just a reminder: the 372580oz that Quantum has signed binding contract for is already sitting on very strong chance of making AUD $980mil to AUD $1.25bil if gold price will be at average USD $3500 - $4000 by 2028-2030. Will Quantum accept to lose that potential of $1bil-$1.2bil for not paying USD $9.8mil? In my opinion, there is no way Quantum would want to do that. It may delay further, yes. But it will never give up on it.