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With the absence of anybody else posting on the AGM I will add my recollections and thoughts as I attended the AGM last Friday.

There were around 12 shareholders/analysts/brokers at the AGM.

There were 2 Directors and the Australian based company secretary. Mark Rodda (who chaired the meeting), another Director that I can recall his name and Simon Robertson. Of particular note was the absence of Gill Winckler and Colin Steyn.

Gill was not at the AGM as she stated that she was at Calgory terminating around 1/3 of the staff to reduce costs until approvals and finance are finalised.

A conference call was setup and Gill, another Director and an accounts guy – Colin Steyn was not on the conference call.

The conference call was poorly structured with the overseas parties not being able to properly hear questions, with Mark Rodda often required to repeat the questions, the answers however could be clearly heard.

The voting took place relatively quickly and I must say that Simon did not seem to be particularly interested or professional, as regard Resolution 1 concerning the remuneration report he missed the first show of hands and had to call for a reshow of hands and I feel that he still counted and recorded them wrong (in a small room of less than 12 voters), during question time a shareholder asked for a vote clarification and the numbers given did not seem to correlate to how I saw the hands – having stated that the results would most likely have remained the same. My thoughts on this were that it was poorly handled by somebody who appeared to not want to be there.

Question time was more informative and these are the answers that I recall:

Our new overheads are around $300,000/quarter and in March we had a little over 5 Million in the bank.

Approvals are likely to some weeks way, but I got the strong impression that the approvals were expected and it’s just government red tape holding things up.

Upon approvals being granted this will trigger around 6.5 million in additional costs of which most is payments to first nations and the like – at the time I though why do they get paid before production but then they would have a strong argument that once approvals are given then construction can commence and this is when their inconvenience (?) starts. I am not happy about this but it is what it is.

So we have sufficient funds for the next 12 months (in survival mode) but insufficient funds to cover approval costs (and progress the project). Essentially we need around 7 million to cover approval and 12 months overheads of which we have 5 million (or maybe a bit less now) anyway I don’t see HP letting this fall over for such a small amount.

The current coal price is around $73 and our FOB production costs is $58 so while we are not hugely profitable but we are certainly not dead in the water with a totally uneconomic project.

CPL believes that short term the coal price will remain around $73 but are expecting a recovery to $88 in 12 months or so and then remain at this level or increase to higher levels from there.

Simon was asked if the any other changes in the top 20 shareholders had occurred apart from Gavin Arglye his reply was that there had been no other changes in significant holders – not really an answer as any other significant holders changes have to be announced but we do have top twenty holders who are below significant holder levels and it would be nice to know of these are selling or buying – we were only given the ASIC required information.

A fair bit of discussion occurred on “advanced negotiations with financiers” and what advanced is defined as, we appear to have been advanced for 12 months or more, this discussion went around and around a fair bit and no definition was provided other than they are talking to several people/groups and that the discussions are based on equity/ price/rates so we have nothing concrete like a MOU or any contract.

EIG are evaluation their level of commitment and when asked about anticipated time frames for EIGs commitment it was expected as months not weeks way.

We need just over 500 million to get this across the line (project costs and overheads) and 250 million was suggested (several times) as a possible new EIG value and if this was the case then we are chasing another 250 million. I took this to infer that CPL were expecting EIG to offer finance but reduce the amount to 250 million.

Overall I was disappointed with the AGM it was as if we had 3 CPL Directors/management that were reluctantly there because they had to be and they were expecting a bollocking from the shareholders.

We have a world class huge resource that can still make money at current prices and in my opinion will go to production. Shorters and day traders will continue to influence this company’s share price and play on delays, coal prices and finance uncertainties.

It would appear that Gill has brought a BHP mentality to CPL rather than a hungry feral attitude required of a start-up miner and as a result tried to build the infrastructure too soon and burnt some $’s unnecessarily, clearly CPL have underestimated AER’s approval process.

I am not sure that any senior changes would be of benefit now or just destabilise the company further.

As regards the resolutions it’s interesting to note that HP put their shares/vote behind re-electing Gill but abstained from voting for Gills performance shares and options as well as the employee performance rights plan (while this was not discussed when you look at the AGM results/voting no other conclusions can be made). So HP left it to the other shareholders to decide on these issues. It also came close to a first strike on their remuneration approvals.

I will add more thoughts if I recall anything else.


Newbie Thomas