Ann: Mt Cattlin Update-GXY.AX, page-57

You can take that for granted. They missed by 50% budget wise and missed by at least 100% timeline wise. And I bet there will be several more delays before "nameplate" throughput can be attained. After all the excitement about first delivery has settled, more delays during ramp up will occur. How do I know? Well, it's 20 years experience with Australian resource companies. They *always* over promise and under deliver MASSIVELY. This case with Galaxy is a prime example. In January they said first delivery would occur in July. In July (2016-06-12 press release) they said "Initial 15,000 tonne spodumene concentrate shipment on schedule for September 2016" and in September they say it's gonna be December. 6 months have been extended to 12 months already and we have not yet crossed the finish line. How this can be perceived good news is perfectly beyond me.

Galaxy has struck off-take deals. Pre-payments in excess of A$13M have been received. They committed to selling 60kt + 15kt during 2016. That's going to be basically zero now. They also committed to selling 120kt or more during 2017. Will they deliver on their 2016 commitments first? If so, doesn't that make it impossible to fulfill their 2017 commitments? What does it mean for Galaxy? Do they have to accept pre-determined price reductions in such a case? Do they have to pay a penalty in case they fail to deliver a certain minimum as it is common practice with such supply agreements?

This is all going in the wrong direction, Gents. And it's going to cost us serious money.