Ann: Goulamina on Schedule Post Discussions with Mali Government, page-385

For a $700m drop in MC, what was it that the market didn’t like?

- $50m taxes etc levied that shouldn’t have been - our share $25m, doubt Ganfeng/Chinese Govt will let Mali get away with that for long

- DSO at current prices of about $300/t there is little profit, in any case IMO they’ll probably allow a few shipments for logistic testing.

- Negotiating the free carry 10% - that’s been ongoing for some time

- Although the extra 10% wasn’t mentioned in the correspondence, IMO most assume it will occur

- New mining code, we are operating under the “establishment agreement” under the previous code. From the Webinar, this is quite a comprehensive document

- Selling down our interest by 5%. More on that later, but 5% certainly isn’t worth $700m

- Questioning re our association with Firefinch - Goulamina is owned by LMSA which is owned by MLBV, they can’t hold a 55/45 JV liable for debts of FFX, IMO they are just flexing a few muscles along with the taxes

IMO totally oversold for the above reasons, there was also some good news - the Ganfeng cooperation agreement was signed with benefits including Stage 2 now a firm 500ktpa to start construction 12 months after stage 1 is complete & internally funded. Just the extra profit from going from 300ktpa to 500ktpa is worth multiples of the points above. It also looks at stage 3 and downstream as well as more exploration in Aust.

Our SP is now back were it was 4 months ago in May, so is LTR’s, CXO’s is lower, SYA lower.

Simon says the 5% less ownership is the same as the extra 10% shares that were to be issued under the Ganfeng placement that would have caused dilution. I don’t think the market agrees.

US$137.2m goes into the JV account which is now 55/45 owned by Ganfeng & us. So they’ve paid us US$61.75m (137.2 x 45%) for that 5% (A$95.5m), under the Placement they were paying A$106m for 10% of Leo, given Leo owned at the time 50% of MLBV - it effectively would have increased it’s interest by 5%.

I personally would have preferred they just did the original placement at 81c. Maybe Ganfeng knew these recent events would affect our SP and didn’t want to pay 81c. The main reason I think the placement would have been better is because Ganfeng now own more of Goulamina than we do. Though their main interest is getting the offtake & I think both companies have aligned ambitions for Goulamina, I really don’t like being a partner with a smaller holding - we are no longer equal

Interestingly paying A$95.5m for 5% values 100% at $1.91b or our 35% (assuming Govt takes the extra 10%) at $668m which is where we finished today

Paying A$106m for 5% values 100% at $2.12b, our 40% at $848m (the original placement)

Although it appears equal, Ganfeng have come out in front with this new arrangement and that’s ignoring the premium you’d expect to pay for having the larger share or having control.

Today our peer Liontown’s Board provisionally accepted a $3 offer. 2 very different stories, their SP went up 8%, ours dropped 50% mind you both SPs are back where they were 4 months ago in May. - SP wise nothing has changed for both companies in the last 4 months. Unfortunately their story has ended, they won’t get to see the big increases when they start earning the big money. On the otherhand, despite today, when we are selling 500ktpa with 1000ktpa 12 months away, our 35-40% holding will be earning multiples of our present market cap and we certainly won’t be valued as we presently are.

Our management has been upfront, factored in a worst case scenario a bit like CXO’s management has, I believe most of these hurdles will go away, just as that tax bill FFX received went away.