Ann: Notice of Extraordinary General Meeting, page-82

I buy sharesto make money, not tolose it; change is needed

I’ve got quite a few PNN and I bought them to make money, not to lose it. I feel that there is an increased chance of losing money if we don’t have Board change soon. A combination of several things has prompted me to vote “For” each of the 3 resolutions. I think it is much more likely that we’ll make money if enough people vote ‘For’ and the resolutions are passed.

Woeful inaction on high potentialassets

PNN should never have got itself in the current position given the highpotential of its assets, which include:

* a tremendous block with known kaolin and quite possibly halloysite, directlyadjoining the hugely important kaolin / halloysite acreage of the $400MAndromeda Metals(AND);

* lithium acreage with clear value in Argentina;

* other sought after explorationpotential e.g. - to quote from PNN’s website:

“Regionalinvestigations by the South Australian Department of Mines ...have led to the ...identification of voluminous layered mafic-ultramafic intrusions ... withevidence of sulphide bearing ultrabasic rocks and elevated levels of nickel,copper, platinum, palladium and gold. Pentlandite and chalco-pendlanditemineralisation has also been recorded in surface samples collected ...”

Commodities boom being wasted

In the currentstrong markets for thecommodities of interest in our portfolio, we should have either aggressivelygot after these assets, or monetised them if we were spread too thin to do themjustice. Under no circumstances should the then Board have just sat on high potential assets without commensurate activity. Directors and staff still get paid but nothing will be found without diligent and persistent exploration in harmony with market interest. With no income, exploration companies have to explore diligently enough to attract fresh capital on reasonable terms or else they will ultimately go broke.

Inaction causes loss of opportunity, frustration,loss of confidence in management and share price falls as net selling increases. Share capital can blow out terribly as the pool of people prepared to keep propping things becomes too small to do anything other than pay the wages (despite the inactivity), running costs etc. Increasingly desperate sellers + lack of buyers -> spiralling share price -> shares on issue blowing out as new raisings require more shares to be issued for the same $ raised. When this goes on for too long, the share price gets cut to ribbons. PNN’s 100:1 share consolidation of late last year illustrated the problem starkly. We are fools if we allow ourselves to drift into that situation again.

I’ve had enough –others too

I’m not surprised that a very large shareholderhas taken this action. I’ve had enough with how things are going too, and so has each of my colleagues who are shareholders. We are well into a bull market – PNN’s management needs to extract the digit:

The PNN Board’s letter of 21 June says the Requisitioning Shareholder is notoffering shareholders anything” (meaning a premium for possible majority controlof his nominees to the Board). I disagree. There is no evidence that he’s trying to buy >50% of the share capital. He does however seem to be offering change – thankfully - and as he has a large shareholding I assume that he would want to see a better performing share price, presumably underpinned by more active and focussed activities.

When I ask myself what the current Board is offeringas an alternative, I worry that it will just turn out to be more of what hasgot us to the current position of under-performance. More about this later when I refer to how the Board’s letter admits ‘full responsibility’ for under-funding the company and the resultant ‘adverse impact on the share price’.

The Board’s admissionabout the concerns of shareholders

The PNN letter also says that it presumesshareholders will be informed about “whathas precipitated (the current) action”. How about this then as a guess – from the same letter of 21 June. The letter says:

“It is important that wenote that the Board is not oblivious to the concerns of shareholders. We know that some shareholders have expressedconcerns about exploration progress, shareholder communication and share priceperformance. We ... take fullresponsibility”.

Well done for the acknowledgement but if the loss of confidence in managementis has serious as I think, I’d be surprised if shareholders allow the team thathas put us in that position to now miraculously lead us to where we should be.

We don’t want to makeexcuses - but ... these are our excuses

It’s alsoembarrassing for the letterto then say “Without seeking to makeexcuses ...” and to then go on and do exactly that – to seek to excuse underperformancebased on time taken to grant tenements, COVID-19 and a lack of funding.

The letter says:

“...we have unfortunatelyfor an extended period had to endure somewhat of a hand-to-mouth existence,with exploration activity only taking place when funds became available. Given that ... our various projects haveconsiderable prospectivity, this has been a source of great disappointment forthe Board ...”A flow-on effect of the lack of exploration activity has beenthat we have not had much to report to shareholders, which...has had an adverseimpact on the share price.”

Let’s cut to the chase. That honest but embarrassing admission (reread it) should have been apparent a loooong time ago. At this stage it reads like a bit of an epitaph to me. There’s been plenty of money around for a long time in the sectors in question for decent exploration plays. The resulting “adverse impact on the share price” caused by failure to get enough capital was entirely forseeable. Those who should have got the job done need help – yesterday! New Board appointments are overdue. Others less kind than me might say that accountability should be more pointed.

I understand the tactics but the questioning of what precipitated theRequisitioning Shareholder’s actions may lead to even more embarrassment for somepeople in the company. This is especially so given that the Company has done a minor flurry of things recently apparently triggered by the forthcoming voting. If only the assets were worked so vigorously.

Capital management

The 21 June letter - para 3 on page 2 - says:

“Pleasingly, the Board has recently been ableto secure additional funds such that, as at 31 March 2021, PepinNini had $3.2million at its disposal....it is a long time since the company was in such agood financial position...”

And yet, on 20 May it was announced that a placement of 1.4M shares hadbeen done - at 23c each - to raise $322,000 before costs. 22c was the lowest price at which the shares had traded since late 2020. The day before the raising shares had traded between 27c and 28.5c, closing at 28c – 5c higher. The Board’s letter of 21 June – and my own opinion - was that raising was not necessary at that time, particularly as it was done at 5c below the previous day’s closing price. I am very apprehensive about how the Company manages its capital given that it had to undergo a 100:1 consolidation late last year because the capital structure had become so inappropriate. There also is an agreement with Acuity Capital (I think), which frightens me in the hands of people who are not capital management savvy. I wish this had never been entered into and it should be discharged IMO.

Management is the crucialfilter through which assets are dealt with

Speaking of important aspects of management, PNN’s market cap at 26c is~ $11.6M. Given the potential of the assets, that suggests a heavy management discount is being applied to the asset portfolio. That needs fixing, so logically some change is necessary. With assets on 2 continents and only a small team, management needs to be both very focussed on what needs doing and by when, but also able to manage some key tasks in parallel, not just in series.

Yes, industry experience is needed on the Board but not every person hasto have an industry background if for example they have quality managementskills. There are experienced people around who the Board could use if it chose to engage them.

Current rush of blood toappoint

Incidentally, why wasn’t the experienced gent who was suggested by theBoard on 15 June as a possible appointment recommended to shareholders beforethe suggested appointment of the 2 Directors by the Peter Proksa on 4 June?

And then why on 16 June was an investor relations adviser group, whichwas described as having worked with PepinNini and MD Rebecca Holland-Kennedy, appointed‘effective immediately’ when a new Director who is the MD of an investorrelations and corporate communications business and who was described as having‘an extensive background in investment markets and the media’ was appointed tothe Board on 5 May?

So, suddenly the Board now sees fit to appoint 2 people to the role,when there is little activity in the field. This makes me feel uncomfortable about how much money is going to be spent in this area – and on what – following the company’s May capital raising, which occurred even though it apparently had $3.2 million as at 31 March.

Recalling that the Board suggests (see above) that shareholders should beinformed by Peter Proksa as to what precipitated his action, in the same spiritwhy hasn’t the Board explained to shareholders what precipitated this apparentlyexcessive action. Let’s give the recently appointed director, James Moses, a reasonable period in the role before we spend more of the precious money that the Board is saying was needed for ‘exploration activity’! Goodness...

Questionable voting formand unhelpful procedure

I was disturbed by the green voting form that the Board sent out. PNN’s directors had a duty to send out voting forms and of course the existing Directors should be able to suggest their collective views as to how they recommend shareholders vote. However it was quite another thing to complete the Voting boxes – with crosses in each Against resolution - for the shareholders! To also do that on a prominent green paper (the only green document among all the other white pages) would inevitably attract greater attention to that piece of paper. The consequence was that anyone who wanted to vote ‘For’ had to find a blank (unbiased) form upon which to vote. No such form was provided in the envelope that was sent to me with the letter dated 21 June 2021 (although one was contained on the materials sent earlier).

The ASX should investigate that, IMO. I doubt that the green document is a valid voting form (since it did not leave open the possibility of voting ‘For’). Secondly, even if it is, do PNN’s Directors who agreed to that regard it as good governance and in accordance with PNN’s published fundamental document, its Board Charter? The first 2 bullets of that Charter - from its website - state (with underlining by me, for emphasis:

“We explore

With the intention to

* Reward investorsby discovering and developing major mineral deposits

* Conduct explorationand corporate activities in a responsible and professional manner inaccordance with Industry Standards whilst observing statutoryrequirements...”

I doubt that well-regarded industry representatives would consider that PNN’sbehaviour surrounding this voting to have met that test. I don’t and imagine many shareholders would feel the same way and would regard it as an unbalanced, rather coercive and unhelpful (to “For” voters) approach. That is not my view of ‘a responsible andprofessional manner in accordance with Industry Standards’.

Lastly, shareholders have a right to vote. Why not make it easy for us to do so – online, saving mail etc.? Sheesh.

I feel that shareholders could have been shown more respect, especiallyfrom a company that has properly admitted to important shortcomings that itacknowledges have cost people money aka had an ‘adverse impact on the share price’. It’s more of our money that is being wasted while the Board collectively chooses to act like that. So yes, I voted ‘For’.