IVZ Project Update / Clarification

I thought it would be a good idea to have a chat with Scott regarding certain topics that people have been talking about. Including clarification of a few things, especially due to different media outlets reporting different things.

All I can say is What an amazing director, and a gentleman. He replied to me the very next day and in such detail. My respect goes out to him and his team.

I asked for his permission to share his response and he said he had no issue with sharing, and is always happy to chat to shareholders.

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I will split this into 2 parts.

***The first part is in relation to the PSA: I was hoping you could update me on the progress of the PSA. There has been different things said by different media outlets in Zimbabwe and the public is confused. Also, it has been brought to my attention that last year there were promises of the PSA being signed that never eventuated. (including on your Twitter mentioning it in 2020).

***His response to this (if anything is in bold its because i have highlighted it in bold, not him):

As has been discussed in numerous ASX releases, the Production Sharing Agreement is comprised of 2 parts - the Petroleum Exploration Development and Production Agreement (PEDPA) and the Petroleum Product Sharing Agreement (PPSA). This became necessary because the Ministry of Mines and Ministry of Energy are 2 distinct portfolios and to ensure that the agreements are enforceable and backed by the constitution, they need to be signed by the respective Minister's which have the requisite authority to enter into the provisions in the agreements.
The extract from various announcements below on these agreements:

"The PEDPA provides the framework for progression of the Cabora Bassa Project through the exploration, appraisal, development and production phases, the obligations and rights of each party and the security of tenure for the project duration.
The PEDPA also provides for Special Economic Zone status for the Cabora Bassa Project which will facilitate a host of fiscal and non-fiscal incentives over the life of the project

The Petroleum Product Sharing Agreement (PPSA) contains the fiscal provisions of the project, including the Republic of Zimbabwe’s profit/product share, and takes effect following the commencement of the production phase of the project. The PPSA is undergoing independent review which is expected to be completed in the near future, following which the PPSA is expected to be finalised and executed.

Together, the PEDPA and PPSA form the Production Sharing Agreements (PSA) between the Republic of Zimbabwe and Geo Associates and demonstrates the Zimbabwe Government’s commitments to implementing investor friendly reforms and promoting and protecting foreign investment. The PSA will ensure that a predictable, stable and transparent legal and fiscal regime is put in place that is commensurate with terms in the region, follows international best industry practice, meets the country’s aspirations and provides investors and the country with a fair share of any developed resources."

The tweet last year referring to the PSA were actually comments made by the Minister of Mines. The term PSA is often interchangeable used by the local press and authorities in spite of our best efforts to clarify as above. There was hope of signing the PEDPA last year but unfortunately the internal govt processes took longer than anticipated and was exacerbated by a COVID lock down in January to March. The PEDPA was signed in March this year and provides us with all the provisions we need for this phase of the project. What is important are that the agreements are enforceable and provide the Company with the security and continuity of tenure and a pathway to develop the asset - not rushing to put an agreement in place for the sake of it. These agreements will govern the project for the whole lifespan and it is difficult/impossible to change them and so they need to be right first time.

With regards to the timing of the PPSA it is still being finalised and from a disclosure point of view we cannot provide a definitive time of when it will be signed. We are working through the agreement with Govt and the independent review has been completed and changes being incorporated, but there are no major changes/issues. Under the current legislation and with the PEDPA in place the project is actually covered in all aspects with an existing royalty/tax arrangement that is the most competitive fiscal regime on earth with a 2% royalty on gas and corporate tax rate of ~25%. The PPSA puts in place a production/profit sharing mechanism to bring the country up to a larger Govt take which is commensurate with other countries in the region. We want to put a fair structure in place right from the start. It is in Govt's best interest to sign the PPSA as it gives the country a larger (but fair) stake in the project. The PPSA will obviously be signed in the near future given the independent review has been completed and it puts the country in a better position. I can understand people's anxiety but there is no need as it is all in hand.

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***The second part is in relation to the progress of the project: I am hoping you could update me on the progress of the project in general (i know seismic is underway). But i did see in the latest conference talks about the possibility of an additional land grant (bigger land grant)

I also mentioned to him the fact that some things we have only found out about (or heard about) through the Zimbabwe news sites (which are confusing) or through the companies Twitter account. I provided some feedback in that it would be beneficial to keep the public updated on advancements via ASX announcements too.

***His response to this (if anything is in bold its because i have highlighted it in bold, not him):

As was disclosed in our previous presentation and announcements, the seismic acquisition is expected to commence in the current quarter and is on track to do that. With regards to the information on Twitter, the Company puts out these minor news pieces in this manner when appropriate to do so to bridge the gap so that the news whilst interesting is not what we would define as worthy of an ASX announcement. It is a bit of a balance but generally speaking we put out announcements for significant developments and not just for the sake of it, but take on board your comments on frequency of announcements and information.

The media coverage that we receive in Zimbabwe last week was the result of our participation in the Chamber of Mines AGM and conference which was attended by our country manager Brent Barber who provided a presentation on the overview of the project and keys to success in the oil and gas industry, and then sat on a discussion panel. The comments on increased acreage were the result of a question directed to him on the panel session regarding the acreage sizes and that it would be nice if we could increase exploration block sizes. The media which was present at the conference then reported these remarks.

This project is very closely watched in Zimbabwe as you can probably gather and there is a lot of reporting on our activities. Again, the media do not always get everything right as there is a knowledge gap in oil and gas reporting and it is a futile job correcting everything that comes out so don't believe everything you read! Further, we can't make announcements based on comments made by Govt officials whether it be the Minister or the President. However, it is obviously very pleasing to have such strong support for the project from Govt.

The vibroseis equipment is on the boat and sailing to Durban and then onto Harare by road. The seismic camp site has been cleared for the camp build and Polaris crew on their way. The seismic survey has many moving parts and a lot to organise and there will be ASX announcements made once the major milestones in the survey get underway.

Regarding the share price it is obviously front and centre for investors such as yourself and something that we are mindful of but something that I don't generally fixate on from a day to perspective. I think in general we have done extremely well given we completed the placement only 6 weeks ago at 11 cents and had strong support above the placement price and in the absence of any real newsflow / catalysts. The good news is we have a very active period ahead of us with a number of catalysts.