AGM 2019 Notes

AGM general info from my notes during the meeting.

Started at 1100, all the resolutions were dealt with by 1109 and the agm was closed!

Geoff the new COO was introduced to give his background and talk about what he is up to within the company, these are the points of interest

· He is one of the founders of Ausmex and been on the board since.

· Moving towards production the company felt they needed someone with a production and plant background to focus on this. All the guys know each other for years and work very well together.

· He has resided in Burra for the last 2 years, to purely progress the Burra project.

· The area is a wealthy conservative grazing and cropping area, the Local member is the Minister for Mines!

· He has worked hard on getting close connections with the locals, dept & minister, council and landowners.

· He has a great relationship with the landowner where we are drilling.

· Nicole Galloway Warland – project manager for Ausmex Burra, very highly regarded, chairs the local mining council etc

Cloncurry

· He had a meeting Wed in Brisbane with Roundoak minerals about where they are with their plant and he has to get back to them with Ausmex proposal. He think everything is working out well to use their plant

· They are doing a review of everything with the help of Nicole who also has experience in Queensland to get everything ready for mining & production. Which is a huge step for the company and needs to be done “prudently, properly and quickly”.

Then Matt Morgan spoke about Cloncurry and the days announcement.

Highlights;

· Spoke about being beaten a few times while drilling the area at depth with the RC and diamond rigs, but the assays they did get back at 150m were very exciting.

· The results are “big, its got scale and has depth.”

· Short term he is completely focused on gold production out of Mount Freda & the Golden Mile

· It’s a granted mining lease, so the next milestone is getting a plan of operation for approval, which is a safety management plan for the Mines dept.

· The resources upgrades update is delayed about 10-14 days because they have added extra 3 mining leases to the south Evening star to canteen

· Once they have the Mount Freda, Evening star and Canteen resource update they will rerun the mining study and they have two consultants which they will use one to do reserve statement and the feasibility study and then the mine plan. On track to have this done by April 2020.

· Also progressing Golden Mine mining lease application and also on track for an April approval. Could do both leases at the same time but Golden mile won’t delay Mt Freda. Looking at first production Sept 2020!

· Don’t expect news flow to be too exciting as the drilling stage during this time, but lots of milestones coming up.

· Long term they are planning to get significant cash flow out of this operation to fully fund drilling. He reckons there is something big creating all this gold at the surface.

· Won’t need to go back to the market for funds.

Then moved onto Burra

· Comm drilling Tues or Wed, rig on its way from the NT, it’s one of the largest RC rigs that you can get, which can go to 550m.

· Updates next week on drilling

· They spent a lot of time to pick the right drilling company and rig, just because of the depth they plan to drill. There is a lot of ground water in the area and they need to be able to control the water flow with the drilling rig.

· The landowner wants any water that comes up

· SA Mining dept very good to deal with

· This rig can only do RC drilling not diamond

· The idea is to prove the mineralisation as cheaply as possible and that is why they selected this rig. Once proved then they will look at a diamond rig.

· Mentioned hotcopper posters and that everyone thinks the company can’t do 2 things at once like Burra and Cloncurry, which he said was complete rubbish. Both proceeding with their own project managers and on target in parallel.

· Burra has 7000km2 and 7 targets and they show what they hope to show from this drilling there is the possibility to do something ourselves or farm in with another company

· We are only looking at 2 targets within target one at the moment. Still have 6 other targets to investigate

· They’ve done surveys over the entire 7000km2 and know / understand the ground.

· They are close to proving Burra and progressing the goal. And it’s all fully funded.

· A lot of the cost associated with Burra because it was done with the university is subject to R&D reimbursement allowance until they get a result from drilling. This will result in very cheap drilling costs. A lot of the survey equipment even provided for free from the university.

· He then described how they picked the areas for drilling using the university equipment. This was fairly complicated but interesting. This was completed over a week ago and gave them the targets

· Expect chip results from the rig samples coming up to xmas, they will then be sent to the labs and results after xmas, mid January. Labs results much faster in SA.

I then asked about how many rigs they had drilling in QL and the results?

· Matt confirmed that drilling has finished and they are still waiting on more results. He expected them a month ago!! Next 7-10 days for more results hopefully…

· I asked about Newcrest results. He said they’ll argue that they aren’t material. Matt thinks that they wouldn’t have drilled it a 2^nd time if they didn’t find anything the first time! He reckons they’ll play a long game. Newcrest wanted AMG to sign a confident agreement & JV back in Feb, but the board refused as there wasn’t any benefit to the company because you wouldn’t be able to release any results. Newcrest won’t like us mining at canteen next year, so that might move them in some way.

Then started talking about the plant for mining.

· There’s a million tonnes of production capacity in Cloncurry, but no one has ore. So we are in a great position.

· Cost to produce $35-40 / ton

· They have a great relationship with the contractors who built the plant

I don’t think they drilled very deep in Cloncurry from everything that was said at the agm, but the plan is to do deep drilling once we have the cash.

Geoff talked about how the company well they managed costs, there no fat in the company, no offices, no secretary, company cars etc. He reckons they are the most economical mining companies around. Extremely low overheads even when they start mining.

Going to be very fussy picking a contractor for mining, to get the right team. I was very impressed with the way Matt and Geoff spoke. Talked about using local Cloncurry workforce.

I asked about the company being undervalued. Matt said as they hit milestones the market should react with a better share price, but we won’t get our full market value until we start production. Granting of 2^nd mining lease will add a lot of value to the company.

Overall the AGM was very interesting and I’m really happy I went. Walked away very happy to be a shareholder with them.

Let me know if theres any questions.

Patrick