I found it very beneficial attending the AGM and to have the opportunity to have conversations with the Chairman, CFO, Secretary, MM and SB. As expected, they are all very busy making CXO the next lithium producer, which I have no doubt they will achieve. I am very impressed with “world class” directors and management. Worth checking out their bio’s again if you haven’t for a while.I was surprised there was only one other shareholder in attendance as well as us 4 HC posters. A very big thanks to Tacair for asking the tough questions and expressing the concerns of the many views on here. Awesome job. I believe Directors and management took notice. Sorry guys I didn’t get a chance to catch up.
Great summaries from Tacair and Brumbie already posted. Below is my summary:
MMP –Currently sitting with NT Gov for approval and expected in Dec but out of their hands as in the Gov system. The ancillary Mineral lease acquired from LithiumPlus was required to meet the MMP conditions and was recently signed off by the surveyor general so may of been the last hurdle for the MMP. Other terms have all been agreed including security bond and concessions made not to travel on the road in school pick up and drop of times. I was surprised to know full production only requires 6 trucks a day which is a low impact for the locals,which is great. All conditions reasonable and accepted. They have to put a slip lane in to site which is currently out to tender.
Directors purchasing at market – As expected, the ASX has strict rules about Directors purchasing and selling shares. There is limited windows of opportunity to purchase/sell shares and constraints to purchase at any time due to the insider knowledge they hold. This is particularly difficult at the moment with all the price sensitive negotiations happening. I received the impression they were trying to work out how they could purchase. One way was through the issuing of the 6coptions. I thought this was a little low but it does mean each Director would have to put up $300k of their own money to exercise them, which is quite a commitment.
Revised DFS– Revision of DFS planned to be delivered Q1/Q2 which will incorporate the current round of drilling. They acknowledged the market has indicated they want a bigger resource. SB was not willing to estimate the resource size, nice try though tacair.
Current drilling results due over the next few weeks.
Resource quality – I hadn’t fully appreciated previously how much of a high quality spodumene resource we have and how the low capital cost simple Dense Media Separation (DMS) processing plant is a direct result of this. This is a substantially cheaper processing plant to set up and operate compared to what other producers use and is due to our resources low impurities, thick ore body and coarse crystals.
Poor communication – this was discussed a number of times during the meeting andalso in one on one conversations. There are tight ASX regulatory restrictions on what info they can release, which apparently are getting tighter. They have tried to focus on price sensitive announcements only. A few of us made it clear communication needs to improve and general marketing need improvement like theCXO twitter account hadn’t been updated for more than 17 months. They were open to ideas and examples of companies that are communicating or delivering presentations well and certainly open to be contacted.
Funding –They are well aware of the debt burden other companies are under who organisedquick/expensive finance to get in at the peak of the market and are “learning from their mistakes”. There is so many options to fund the project and they will come up with the best strategy for Core with a possible mix of prepayment,equity, finance, Primero etc. We are in a great position especially with MM on Board to come up with a smart solution.
Yahua deal –They are still a major shareholder the relationship is strong and a mutually beneficial so unlikely to fall over. Yahua are very supportive and will need their high quality product.
10%additional placement – I was curious what the 10% additional placement was for and if there was any plans to use it. They all said it was a buffer and offered flexibility if needed but no one would let on if there was any plans for it.
The delay is really a result of the overall lithium market which we all know about and as much as I don’t like it have to agree with. They were very confident of a quick build time 8 – 12 months if things did turn around, which was good to hear. There will have to be a SP increase at some stage going from a $30mil junior exploration company to producing $160milAUD in revenue per year. Who knows when that will be but I believe it will happen and I'm in for the long haul. Of cause just all my opinion DYOR.
(20min delay)