An unholy Trinity: USD 125m < 10 mths to resolve.....

Hello All,

The clock is still ticking we have just 10 months to finalise refinancing of our growing debt pile. I'm extremely concerned that the debt issue must be resolved realistically within 4 months as I do not believe that 6 months will be sufficient time in a highly volatile market.

A40 appointment of administrators. Several entities reported to be interested in A40 by the media, walked away.

If investors are willing to walk from a cents in the dollar acquisition for A40's asset, it begs the question "why would you refinance AJM"?

AJM product pricing has been consistently ~20% below MIN.ASX Mt Marion and GXY.ASX Mt Caitlin for the last 18 months. Is this due to product quality issues?

PLS.ASX has shown that they valued first mover advantage more than AJM as they tapped the market in a very aggressive way - I really don't want to guess how large the discount AJM has to offer will be to get any sort of equity issue away in the current environment..

Although not to repay debt..... makes you wonder if AJM may also have gotten the plant design wrong as well and need to capital raise just to stay in production? Does anyone know?

The combined debt and equity raised by PLS.ASX & A40.ASX is close to AUD 180 million (PLS AUD 110M / A40 Debt AUD 70M) of potential funds that AJM could have accessed if management had been more focused and on the ball.

Maybe though the bigger problem is AJM.ASX stated more than 2 years ago on multiple occasions they were going to refinance this debt. Why are we still waiting? what's the hold up?

Maybe what we're offering isn't that palatable to those sitting at the head of the table. Perhaps they're full from digesting the prior AUD 180 million buffet of debt and equity served so recently.

So onto the unholy Trinity.....

1. Spodumene prices continue to decline - latest prices -6.1% fall in Spodumene prices shown below.

2. Sector bankruptcy including both up and down stream as shown by A40.ASX and Hong Kong favourite, Burwill Holdings 0024.HK. Both these bad boys are in administration and their partners are hurting.
3. All investors deserve to know - what is Pala thinking or doing - the Russian debt funds are not known for their generosity. Do yourself a favour and do a google search for Pala Investments - most investments end very badly for all involved.

Fastmarkets commentary "Most producers have material in stock and finding it difficult to sell their inventories" - implies lower spodumene prices coming.

Key Questions for AJM:

1. Has AJM spoken to debt holders about likely breach of key debt covenants at the end of September?

2. Are breaches of debt covenants going to be reported by AJM voluntarily or be forced to be reported by ASX 3 months later like in January?

3. Why did AJM not do a massively dilution capital raise like PLS (~20%+ dilution) to provide it with cash to make debt repayments?

- Likely AJM share price will never recover but better than the alternative.

4. Does AJM has the cash to make the next interest payment or are we going to capitalize again and end up like Tiger Resources?

5. If AJM can not repay debt in 10 months will Pala (who traditionally wind companies up to recover funds) send in administrators to recover the debt like Tribecca / GXY did with A40?

2. Are breaches of debt covenants going to be reported by AJM voluntarily or be forced to be reported by ASX 3 months later as in January 2019?

3. Why did AJM not do a dilutionary capital raise like PLS (~20%+ dilution) to provide it with cash to make debt repayments? Or have we missed the opportunity here?

4. Does AJM has the cash to make the next interest payment or are we going to capitalise interest yet again and end up like Tiger Resources with the debt holders ultimately owning the company?

5. If AJM can not repay/refinance our growing USD 125 million debt in 10 months will Pala (who traditionally wind companies up to recover funds) send in administrators to recover the debt like Tribecca / GXY did with A40?

1. Has AJM spoken to debt holders about likely breach of key debt covenants at the end of September?

2. Are breaches of debt covenants going to be reported by AJM voluntarily or be forced to be reported by ASX 3 months later like in January?

3. Why did AJM not do a massively dilution capital raise like PLS (~20%+ dilution) to provide it with cash to make debt repayments?

The soon to be released September Quarterly report will allow us all to see the truth. In my opinion I think it is going to be ugly. Very ugly. It could be what drives us back to 5.8 cents or lower......