From the report……… Flinders Deputy Chair and Chair of the...

From the report………

Flinders Deputy Chair and Chair of the Infrastructure Committee, Cheryl Edwardes, said:
“Today marks a significant step forward for our PIOP project and we are delighted with these outcomes. The Independent Review by PwC provides independent validation that the most favourable option for Flinders to unlock significant value for all its shareholders is pursuing an arrangement with BBIG. The non-binding arrangements announced today provide a framework for Flinders to engage further with BBIG while the agreements with PIO Mines Pty Limited and TIO underwrite critical funding requirements. “The next stage of the process will involve negotiating binding agreements and comprehensive engagement with all of our shareholders to explain the proposed agreements and seek feedback prior to seeking shareholder approval for the Proposed Transaction. We are determined to strive for independence and transparency in our dealings with BBIG, which is a related party to our major shareholder TIO.”

An Independent Review by PwC concludes BBIG provides the most favourable PIOP infrastructure pathway. Non-binding Terms Sheet to jointly develop PIOP agreed with BBIG • Proposed Transaction to include Board governance protocols and minority shareholder protections • To support working capital, Flinders has agreed a Loan Facility and Subscription Agreement with TIO • Binding Transaction Documents, if negotiated, will be subject to minority shareholder approval with an independent expert to determine whether fair and reasonable Flinders Mines Limited Page 2

Who was it that said “The lady doth protest too much, me thinks”?

Also note that PWC are very clear in stating that they were given the terms on which to assess (independently) the best option for this project. BUT, if I’m reading this right, they have only really been asked to assess based on the best infrastructure option, and what is more, FMS gave them the alternatives to assess (happy to be corrected in this assumption).

Let’s say that out of the options provided, Balla Balla is the best option (and out of those provided, it may well be), but surely that is only half the question our independent committee should be asking, and in isolation this does not represent the bigger picture. Surely, the second part of the question should be “If Balla Balla represents the best infrastructure solution for FMS (after all WE own PIOP), what is the best financial model for leveraging the PIOP asset, and returning profit to FMS and it’s shareholders”?  Having an independent board looking, with gusto, for independent financing to bring OUR PIOP into production, and then simply paying BBIG a fair market value to transport it for us, is surely in FMS shareholders best interests, or is at least worth considering?

If you were stood on the roof of a burning 80 storey building, and given the following options to assess independently: -

1.   Jump
2.   Burn
3.   Or we can give you a lethal injection and put you out of your misery

Two things are clear - Any independent assessor could, in good conscience, advise you the best option would be the painless lethal injection.
However, if the option of the perfectly safe escape helicopter sitting on your roof, ready for take-off, was not considered, you’d have to question the legitimacy of the exercise – right?

Again, just my naive opinion and I’d love for somebody from the FMS board to put me right. Maybe hold an extraordinary meeting to explain the plan?

And one final point, with all this investment going on, and independent reports being commissioned, wouldn’t it be prudent to get a truly independent company to go to market and have a good look at finance options for FMS – just in case our board had accidently missed something?