Ann: Response to ASX Query Letter, page-3

Uhm, below, is the crux of the matter concerning Bassari being required to explain:

Bassari Resources Limited (‘BSR’): Queries regarding Accounts

ASX refers to:

“Basis for Qualified Opinion
Bassari Resources Senegal SARL (Bassari), a company incorporated in Senegal and a wholly
owned subsidiary of the Company had negative equity of approximately $8.45 million
(approximately 3.42 billion African Franc) as at 31 December 2019, which was in breach of
the local Corporations Law in Senegal. We also understand that the matter is required to be
fixed by a recapitalisation plan within the allowed 2-year time frame from the
commencement of the matter which ended in 2018. There is a risk that Bassari will be
wound-up by the local authorities. As recognised in the statement of financial position at 31
December 2019 and as disclosed in Note 14 to the financial report, a capitalised exploration
and evaluation asset from the Moura exploration permit of $5.99 million arose from the
subsidiary. If Bassari is dissolved or wound up by the local authorities, the Company may lose
its interest in the capitalised exploration and evaluation asset. As at the date of this report we
are not aware of any arrangements in place or steps undertaken by the directors of the
Company to secure the Company’s interest in the capitalised exploration and evaluation asset
should this wind-up eventuate. We were therefore unable to obtain sufficient and
appropriate audit evidence to conclude that the Company will have a secured continuing
interest in the capitalised exploration and evaluation asset.”
C. BSR’s Corporate Governance Statement for 2018 lodged on the ASX Market Announcements"