AGM Notes

Hi All,

I attended Friday’s AGM and having been to 3 or 4 previously it was the largest GML AGM audience I have witnessed, although it was spread out for Covid so that may have been deceiving. The following notes are what I witnessed including the sentiment of the room and opinions I took away which is of course subjective. Unfortunately I didn’t make notes at the time so understand some comments are from memory.

Firstly Simon kicked off formal proceedings and noted non-attendees dues to Covid and then quickly went to the resolutions.

First remuneration resolution was passed with no objections other than a question around Jorn’s remuneration. As Paulm1866 said previously ‘someone’ asked about the hiring of Jorn after recently being sacked and if he was on an incentive to get the mining license through. The answer was put to John Mair to answer and he discussed in some length. John noted that Jorn had announced his retirement from office last year and that the engagement was not considered a conflict, with Jorn having already left his position well before any conversation regarding employment with GML. It was also highlighted that given Greenland’s circumstances it is not unusual for people to jump between the government and private sectors. Lastly, John confirmed that while incentives are often built into employees remuneration packages there was no specific incentive with Jorn and he was on salary, while adding that there could always be future incentives as per any other employee.

Unsure if it was at this point or later the person asking the question noted that there was some conflict with Jorn and referred that he was the reason for the lengthy permitting bureaucracy over the years and that in the recent months after he left office that things in Greenland have been moving much quicker.

John addressed this and stated that he never experienced this specifically with Jorn and hadn’t noted anything specific in the last few months but more so in the last 12 or so as Greenland has tried to remove some of the known barriers.

Next resolution and there was a question from a long term investor on why Anthony Ho should retain his position with belief that Tony has originally stated his intention to leave the project once it had reached a closer stage to production (as it is now). Acknowledging this, Simon noted that with a third of the votes against Tony’s re-election there was reason to perform an internal review with any future re-election.

As I can remember the final two resolutions went through with no further discussion, until the end of the formal meeting. That’s when the usual suspect raised the question again of the capex reduction and if the ~$500m current capex included the power generation. Miles immediately rose from his chair and in a frustrated matter passed an article of some description (believe a previous announcement) stating that all the information was there. While I can understand Miles frustration given the lengthy battle with this person he should really handle himself with a little more professionalism and let it go. Easier said than done I know. And in fairness the question, which was answered in some detail by John was credible. John moted that there was originally a 3rd party (Siemens) and went into some basic technical data between hydro and diesel and while hydro had the larger capital start up costs the diesel had larger operating costs and from a project perspective the end result is not to dissimilar in either option, just capex vs opex. In all honesty this was the only question I felt where, while it was answered with some substance, it was still vague and not completely answering the question if it was included in the capex announcement last year. Diesel generation was confirmed as the now preferred power generation option.

There was one other question from this same person, I can’t recall at which point however it was during the formal part of the meeting. The question was regarding the lawsuit and why it was not shown on the balance sheet. Miles noted that it was not a requirement to be shown as approved by the auditors given it is insignificant and being contested.

Following the formalities John took over and decided to proceed to an informal overview of the progress to date rather than regurgitating the previous presentation. I think this was welcomed by the attendees. John largely discussed what we already new from recent company announcements and market sentiment which was the progress with the Greenland Government (GoG) and specifically what the challenges were with this process. This was interesting receiving an intelligent overview respectfully highlighting the inexperience in the government stakeholders who, firstly are well credentialed but have no direct experience with mining at all or not of this complexity, and secondly that being independent from the GoG there is no real incentive for them to progress, however more forensically challenge each area with much back and forth correspondence with the EIA creators for clarity. This really shows how the rabbit hole is created and the delays occurred to the project.

John definitely showed his renewed confidence with the GoG and the forensic detail the EIA was now completed, so much so he mentioned a couple of times that there would be some form of Webinar at the end of the month to ‘walk’ everyone through the EIA submission in preparation for the next public hearing phase. Sounds like a great initiative which I will look forward to.

At this point John opened to the floor for questions. There was a handsome gentleman to the left asking a series of well constructed and intelligent questions which opened some good dialogue with the managing director .

The first question was an addition to a previous question from the audience who asked about the project progress steps that were seen on previous presentations. The follow up question was surrounding the project metrics and with the recent byproduct announcement, along with last years considerable opex and civil capex reductions, and improved REE recovery when we will see the project financials updated. John elaborated on the good progress that was completed and made a good analogy of Shenghe and their performance with Mountain Pass and being the subject matter experts with the ability to get what was seemingly a non-profitable tenure to refine the process so that it was/is. Another interesting insight. In answer to the question it looks though once the EIA is finalized then the next major project milestones such as the DFS and FEED will be their focus.

The same person also asked if there was any dialogue with Trump, which was noted Trumps advisors had been in touch and met with some of GGGs management and broadened the question saying that there is a lot of global interest in REEs and their project in USA and across Europe. To me this was extremely encouraging.

Final question was on where the Company would see themselves if next years AGM was to be held at the same time from a project progress standpoint. As expected this question (straight out of the interviewers 101 handbook) was answered with a sense of generalization and recapped on their focus to securing the EIA followed by the next project deliverables. John was open in saying he expected the ML to be granted next year, which is a more realistic timeline given the GoGs previous permitting history.

In conclusion I was very pleased with the AGM in general. All questions even despite the persons asking were credible. The cooperation in answering the questions was fair and while a couple of questions were answered with some vagueness there was more then enough contribution from John Mair. Even if the EIA passes the next stage later this month there is still much work to do to get this project to production. And despite this I took great confidence from the meeting and particularly the Managing Director that the right management team is in place to achieve this.

Good luck to all.
Floated