Ann: Commencing Preliminary Discussions, page-37

Yep exactly my thoughts - both companies are trading below fair value - as are most base metal juniors and developers.

Two things to expand upon about Mt Hope, firstly, the deposit is quite small and so is the current mining lease that CNB hold, but it might be large enough to fit an underground mine on within the current mining lease footprint, an open pit was wall angle issues and needs space to put waste rock. HMX metals have no recourse and cannot prevent access to a current mining lease for transportation or logistics, HMX have exploration tenure only - which allows them to conduct exploration activities within their exploration license areas. As a matter of fact CNB could elect to create a larger mining lease over Mt Hope but in most states when you add additional mining leases or cancel a current mining lease and replace with an enlarged mining lease there is an administrative process where the holder of the underlying exploration tenement (HMX) has to be consulted and/or compensated by the proponent of the enlarged or additional mining lease (CNB), but crucially the QLD Dept of Mines and Resources can override or make unilateral administrative decisions to settle any delays/disputes between the mining lease proponent, and the underlying holder of the exploration tenement. Now consider the historic nature of the Mt Hope mining lease and the complexity and poor documentation of the exact boundaries of the current mining lease which eventually had to be cleared up by an administrative/departmental/ministerial decision. This has now all been formalized and is probably not legally contestable but I would submit that HMX trying any "cock blocking" or delaying/stalling techniques for the development of any future CNB operation at Mt Hope would be viewed very dimly by the QLD regulators, and the minister, so this would be a dangerous game for HMX management to play. Its possible and likely that some of the Mt Hope mineralization may extend out of the current mining lease and into HMX exploration ground but I understand why HMX has seemingly been reluctant to test this possibility because the market would view any good drill results as simply adding to the resources of CNB's Mt Hope tonnage. Obviously if HMX drill tested immediately outside the CNB mining lease and came up with a large high grade intersection then that would be a game changer and open up more serious consideration of a larger deposit. If HMX drilled immediately outside the CNB mining lease and came up with nothing or only thin squibby results then they have spent money to close of CNB's resource.

Of course any sale/transfer or corporate transaction between CNB and HMX would make all these problems go away.

A simple sale process of some exploration tenements surrounding Mt Hope is the minimum & least ambitious solution but still leaves two separate companies competing for the same contractors and doing the same thing in their own ground where Cloncurry is famous for numerous but small high grade Cu Au orebodies so would seem an inefficient use of capital.

The other more ambitious idea of a full JV and/merger has the JV option preserving the fate of both companies as separate entities but spend in earning/diluting their ownership of the jointly held ground JV area as decided by both separate management teams. For both companies raising cash will be a challenge until Cu prices improve, market sentiment changes and or more exploration success is announced.

The full M&A takeover/merger makes one set of corporate overheads and management completely redundant, but obviously has to be fair to shareholders of both companies in order to be passed.

Which brings up the valuation issue that @Dragone64 has explored, now my personal valuation of HMX's Kalman Deposit is a nice round number of $0 due to the depth/grade and metallurgical complexity and weird specialty metals, and the market is also discounting the value of Kalman to $0 at the moment given HMX's share price. The fact that Kalman has sat there for over 30 years un-mined would also suggest that there is something wrong with the economics of Kalman, but improved metal prices and/or additional discoveries and tonnes or higher grades might change this in the future. Would be an interesting one for an Independent Expert to give an opinion on. HMX does have some intangible but extremely prospective ground, as does CNB and we can't forget the other non-core assets of HMX's WA exploration ground and CNB's Tick Hill (although the tonnage at Tick Hill is very small).

Ignore the spin/PR and noise from the QLD State Government about all the consultants doing work about the future of Mt Isa, all those consultants will be sipping coffee in Brisbane living large off QLD taxpayers, they might fly out to Mt Isa once of twice a year. The current QLD Government is not going to come riding in and save the day for the townspeople of Mt Isa because they are Katter voters and not ALP voters, the QLD state government wants public servants and consultants in the SE corner of QLD voting for the ALP and their own taxpayer funded jobs next election because right now the lifespan of the QLD state ALP government looks pretty limited anyway, due to the youth crime issue/stale government and the unpopularity of the current Premier. The big question is whether Glencore are really committed to closure of parts of the Mt Isa copper complex of mines and concentrators/smelters, or if they are just muscling up to or posturing for the current state government due to their expansion of coal royalties. Glencore are in a bit of a pickle because they have to make long term investment decisions and plans to either find additional ore and reinvest in the Mt Isa operations, or close them down gradually as they become too expensive to refit or operate.

Just my opinions anyway.