Ann: Change of Director's Interest Notice - Alistair Cowden, page-79

There is no doubt the FFX fiasco is affecting Leo. Leo dropped from 62c to 58c straight after the announcement finishing down 15%, well in excess of its peers.

IMO a complete over reaction. Leo is now a separate company, yes 2 ex FFX directors and a Chairman who is being replaced. I have no doubt Simon will bolster the Board with some new talent.

What has changed? Lithium is at all time highs, our construction is under way, the market had a wobbly, we’re fully funded and will be a cash cow in 18 months time.

If and I mean IF FFX becomes insolvent, they would almost certainly be able to sell the Leo shares. Just like when they sold the last parcel, there would be no trouble selling such a meaningful stake in a tier 1 soon to be producer when the World is crying out for more Lithium mines.

If Morila is closed down, will that affect Leo? Absolutely not, let’s face it, Morila is hardly a cash cow to the Government, no profit, Royalties off set by tax credits, whereas Goulamina will be that cash cow the Government needs. If anything the failure of Morila would reinforce that the Government needs to nurture these industries. Morila’s problems started with the sanctions, a direct result of the Governments actions.

Maybe some of the workforce would come in handy. Maybe some of the equipment would come in handy, everything from a SAG Mill, to crushers, generators etc - all possibly at a fire-sale price.

One thing both companies do have in common, is a common shareholder base. When Leo floated about 80 to 90% of shareholders also held FFX shares, these people have been unable to sell their FFX shares, many have had enough and have just got out, sold what they are able to, including Leo.

I can understand this, but must you must understand the 2 projects are 2 very different beasts. Goulamina is a greenfield project, starting afresh, very low strip ratios, especially in the earlier years with the pegmatites protruding from the ground. The ore is 58 metres thick on average, easy to mine.

With gold below $1700, the margins are small, current SP6 prices are about 20 times our C1 cost of mining. As I say, 2 very different projects.