A few of us attended the AGM this morning and here’s some feedback (i’m sure others will add more as they get a chance).
I was keen to impress on management that they need more structure to their options packages - these are an opportunity to convey confidence to the market by creating a package like (example only):
1. 2 m @ 6c expiry 30 Jun 2020
2. 2m @ 10 c expiry 30 Jun 2021
3. 2m @ 15c expiry 31 Dec 2021
4. 2m @ 20c expiry 30 Jun 2022
This would be a method for management to communicate with the market as to what trajectory they think the company may be on. They have taken this on board and will hopefully look at it for future iterations.
The lack of communication with shareholders was raised noting that there have been months without communication so far this year. The management team stated that releasing information can be tricky especially as it may be linked to price sensitive information. Despite this, I asked that if they know that there hasn’t been any updates in a while, could they take away that if they see an opportunity to update the market to fill in some details then could they. They took this point away, and hopefully we will see some additional communication out of them. GE has given me his contact details so I can ring if we haven’t heard anything for a while.
I impressed on them to try and sell the confidence they have in their project to the market. It is clear that they are working on stuff in the background and are a competent team but they need to more confidently sell it IMO. I would like to see in future presentations a focus on resource quality relative to peers and cost per tonne relative to peers (we would be on the upper end of both of these types of illustrations and would highlight why an investor should invest in CXO.
The team was asked why they have not been buying on market, they stated that it is complicated to do so, and it needs to be an individual decision (they cannot colloborate to do it). It was highlighted to them that people watch these kind of movements by the management team, so it has hopefully been impressed upon them that if they see an opportunity, then buy on market. Not as a way to own more shares, but as a way to demonstrate commitment. GE did mention that the options are a way to do this, I stated that the options are a no brainer especially if the SP is significantly higher than now. He stated that it would still represent up to a 300k investment for each member, that they would be unable to sell these for while, and therefore taking up the options is a significant undertaking. I took his point on this, and as a result have relaxed my stance on the options (i still voted no, but i think they will pass).
SB did a presentation, and a few key takeaways were that they are not expecting to be producing until towards the end of 2021. This is mainly because they believe this will be the optimum time for the market to be ready for the product. This is a bit later than I would have liked, but i guess in terms of the current oversupply, I cannot fault the logic. Just means this particular milestone is a little further away than I would have liked. Regarding construction of the plant, they are working on about 12 months to commission it, with a best case of about 8 months, but they are confident that they will get a good product from it. They will potentially look to update the DFS 1st or 2nd quarter next year and are expecting a ‘material’ increase in the size of the resource, although SB would not speculate on what that would look like.
There has been a bit of back and forth on the MMP with the NT government, but they believe they have completed everything they need to and they are just waiting on the NT government. They did state that all the information requests from the NT government were reasonable, and they are hoping for approval by xmas, but did note that if it doesn’t come this year, then we probably wont see it until feb 2020.
SB has just got back from a week in china and he said they there is still very strong interest in CXOs product, and they have a member in japan now (cant recall their name sorry). Regarding funding, he did say that CXO has been invited to apply for the NT jobs fund, I haven’t research this yet, but they said something about 90mil in that.
I spoke to most members of the board, they were all professional and came across as being quite competent. Had a good chat to Malcolm Mccomas, he is a nice bloke and will complement the team nicely. The same can be said for the CFO (simon). We should see some more assays over the coming weeks too!
Thats what I had from it, hopefully that helps you. It was worth attending and I would encourage everyone, that if you have questions, don’t be afraid to contact the company.
Oh
@wenty, the MINRES people were completely unrelated.
(20min delay)