Ann: Project Update, page-400

Dear Tolate,

Think and think

In September 2018, when SDL and noteholders agreed to sign the ANS/WAPRC agreement and noteholders agreed to receive only $50 million plus options (out of original convertible notes of around $133 million), the shares of SDL was valued at 0.0055 due to the following conditions at that time.

1. There was uncertainty of the Mbalam convention extension in Sep 2018,

3. There was uncertainty due to iron price which was around $70 per tonne in Sep 2018.

It was cheap at 0.0055 due to circumstances in September 2018 when the acquisition agreement was signed between ANS and SDL with the approval of noteholders.

Today, everything has changed in favour of noteholders and SDL

1. The iron ore price has gone up from around $70 in Sep 2018 to above $100 per tonne.

2. Based on SDL previous announcement on 3 April 2019, the Cameroon Government has indicated that they will reinstate the Mbalam convention. So it is a matter of time, SDL will receive the reinstatement of Mbalam convention in particular SDL has held 20-year Nabeba Congo mining permit (High quality iron ore). The Mbalam project is not feasible without Nabeba Congo and vice versa.

3. The ANS/WAPRC agreement will expire on 1 July 2019 and most likely, no parties will be able to satisfy all conditions in the agreement except noteholders agree to extend it beyond 30 June 2019. Question: Will noteholders agree to extend the ANS/WAPRC acquisition deal beyond 30 June 2019?

So If the acquisition agreement to be extended beyond 30 June 2019, $58 million agreed in Sep 2018 is not enough for ANS/WAPRC to acquire SDL since the market condition has changed in the favour of noteholders and SDL. There should be an upward price revision from 0.0055 to a higher price or Noteholders own 68 per cent of SDL as per July agreement in 2018. Any option will give benefit to SDL shareholders.

SHINE SDL SHINE SDL SHINE SDL