notes from the agm

Good afternoon folks, just back from AGM's agm, which ran for the best part of 3.5 hours. There were certainly a lot more people there than they had been expecting, so they had to stuff around with opening up another two sections of the conference room. The demographics were pretty evenly spread, not just the usual retirees. It was quite a buzz to be there actually, lots of people there would have made a truck load of money in the past 6 months or so.

Anyway, onto the more intersting things from the AGM....

The formal session:

As expected, there were several questions / objections to the share options given to the employees/contractors and its diluting effect that it has on the company's SP. THR, Eddie and the good Rabi had to spend quite a bit of time defending the board's decision to grant these options. It all came down to the need to hold on to these key personnels, without them there is no Allegiance as it stands today. From my personal point of view, I sit here in my comfortable home writing this report, these people are out there day in, day out in the wild west coast of Tassie to bring me wealth. I can't really complain. They've done a tremendous job and there's a lot more to be done yet.

An interesting question was raised regarding the possibility of dual listing on the Toronto Exchange! THR had to pause for a bit to gather his thought on how best to answer this question, to which he said... it's something that the board is "actively" considering! Make of it what you will .... He drew an analogy with gold companies... during the last resources boom, 75% of the gold producers were Australian owned and today, guess how many? it's only 25%! Most are now listed on the Toronto Exchange. He went on to say that if AGM doesn't grow quickly, it's only a matter of time that a takeover play will occur.

On the subject of Dividend, THR pointed out that it's something that's definitely on the drawing board. They will decide at the time how best to deal with the profit, they may use it to pay off the existing debts first then divi later but his preference is for dividends! This time next year, he sort of hinted that we will be asking at the AGM, not when but how much :)

The informal sessions:

There weren't anything really exciting to report. THR gave a pretty rosy picture of where PON will be with the China boom. They put up a slide on the developed and developing nations' consumption of Ni, China had hardly moved on the chart from 99 to 05. This indicates to THR that the boom has only just started. This probably means that PON will remain high for the forseeable future. He kept on saying above $25k, we'll all be very happy!

With the production plant, everything is going to plan. The project schedule was put up and it was pointed out that all the high risk bits are now behind us. The ball mill is a very low risk component, low technology bit of work. They don't foresee any issues there.

Tim Callaghan, the Chief Geologist, gave a quick summary on their drilling program. There are 3 rigs out there, Bison, East Avebury and Saxon, working as fast as they can. They are looking to build up the reserve as quickly as they can and will announce as data comes to hand. He couldn't really say much more, again ... one needs to read between the lines on this one. :)

The Geothermal stuff was rather uninspiring. They are at the very early stages of exploring the potential. It's important to note that Lindsay had to foresight to explore/exploit Ni when noone else is looking. This can ony be good for the long run.

That concludes what I gathered from the AGM. The only other informal stuff that I managed to gather after the sessions were:

1. There is no plan in place at present to order the 2nd ball mill. Incidentally, the lead time now is almost 2 yrs if one is ordered today.

2. Ian Levy stepped down from the CEO position due to health reasons. He'll be back on board when he's okay again. They've already found a replacement for Ian. I wonder if the SP will have another spike when this is announced?

I came away quite happy with what I heard and with PON to remain high, we can all look forward to reap more rewards soon!