Ann: Q&A on the merger of QBL MCL and Medcan, page-426

RESPONSE FROM SHOLOM FELDMAN, Managing Director of Queensland Bauxite Limited, on behalf of the Board of Queensland Bauxite Ltd, its management team, and employees.

Dear members of the HotCopper QBL Forum:

We have become very concerned for our shareholders, as we have noticed that some individual posters are spamming this forum with multiple posts, sometimes on a daily basis which we believe is "playing a part" in the undermining of the Company, the members of the Board and its employees, partners and contractors.

The company believes strongly in fair debate and the right of free speech for the positive and negative sides of a discussion. But just as it was in January, we have once again become quite concerned to see the same "commentaries/concerned questions" being posted by members who have been repeatedly invited by the Managing Director of QBL, Sholom Feldman, to contact the Company to address these inquiries and help resolve and clarify their issues. They continually refuse to do so.

"BERTON: If you repeat something often enough, people will believe it!"

The facts are that the management of QBL is managing the funds of the Company very responsibly and compares extremely well against nearly any other ASX company in the junior sector. We continue to build on a cash positive balance with the accounts and have done so throughout the most difficult years for the market over the past decade. The cash balance, in spite of being in the development phase of the company, has continued to build each year through and up until, the audited accounts shown at December 31, 2017.

We have undertaken a careful infrastructure expenditure program in 2018 that is managing the use of those funds to ensure that we maintain a strong cash bottom line to fund all projects moving forward. We have been very careful and strategic in our capital raises over the years to maintain a healthy cash balance, primarily through fair and equitable rights issues to shareholders.

We have just gone into the largest transformation project that the company has ever undertaken in its 7 years of trading as QBL in taking over MCL and Medcan without using any cash reserves, so as to maintain a healthy working capital for all our future projects. As part of the recompliance as a cannabis company, we are required by the ASX to currently do a further small Capital raise, which we will invest in infrastructure that will actually produce cash revenue for the company by the end of 2H 2018! We do not have to wait years for a building to be designed or to get a DA approval and a building completed or 3 - 5 years to start earning cash. MCL has already begun to earn revenues with its Hemp Seed Division. QBL is expecting to be bringing in revenues from its Medical Cannabis Division by the end of the 2H 2018. We also have one of the largest footprints of any Australian company in the Cannabis and hemp markets at this present time. How many of the other ASX publicly listed companies can boast the same?

Rome wasn't built in a day. This industry became legal in Australia barely half a year ago. Notwithstanding that, we have built in quick time, very strong foundations that we believe will be a massive business for our company for the long term, and we are very proud of what we have been able to build and achieve over the past half a year. Again, please compare our progress over the past half year to that of any other ASX listed company in this exciting fast growing industry.

In addition to the above, compared with nearly all other ASX listed companies, QBL's operating management expenditure is of the smallest, notwithstanding the huge growing teams and projects now under QBL's umbrella. Remuneration structures of the Company Executives are actually in the low end of the scale compared to many of the other MM stocks presently on the ASX. Some up towards, and in fact, are in the Million dollar a year range. The Board of QBL treats the awarding of salaries as a very serious matter when it comes to paying its Directors and Managers. The Board is mindful that they have a responsibility to caretake and manage all funds responsibly.

We have a devoted team of professionals with PhD's and MBA's, geoscientists, world renown Cannabis researchers and Specialists, large broad-acre hemp farms, contract supplies with large Australian Retail Distributers, a professional HACCP certified Hemp Dehulling facility which was just upgraded with an expansion capability of 10MT/ph, a Hemp Seed Premium Oil facility, a unique Cultivar Seedbank and genetics, a deal with a Canadian Cannabis Pharmaceutical company to import and manufacture Medical Cannabis GMP grade Pharmaceuticals to sell in Australia and Asia as part of our current projects.

We are very confident that this will all continue to be built upon by the end of 2018, and we will see larger crops, increased Retail demand and Wholesale demand, Medical Grade Pharmaceutical, Nutraceutical and Therapeutic products going out to market and strong revenues. We have also been able to partner with Companies that have ODC licenses as well as our own State permits and Licenses that has saved the company a year or two of precious time and millions in infrastructure projects and Licensing fees. This is intelligent management practice in operation.

The company would ask all our shareholders and interested parties to please do your own comparative research between our company and any of the other ASX listed companies both in scope of our projects and assets, and in expenditure; ask Neil1959 questions, when we re-open our Q & A's, contact the company directly if you need direct answers. Please keep in mind that on this forum we cannot provide material information that has not yet been released to the ASX announcement platform, and further material information will be provided to shareholders via the ASX platform as and when it becomes available and in a format appropriate for release.

We are a very open company and are making sure that we provide professional resources to help our shareholders. There is a lot of time wasting at the moment dealing with these unfortunate rumours and innuendos which we believe to be smoke and mirrors driven by people that clearly have a personal or commercial agenda, we can only speculate as to what personal agenda they may have or what commercial gain they or our competitors may believe that they could achieve as a result of their attacks on our company and our integrity. Assumptions of agendas may include anything from competitors through to groups positioning for a takeover of our company before it really launches. Company Takeovers 101.
.
I continue to be happy to communicate directly with our shareholders with any real issues or suggestions relating directly to the current business of the company if they feel that they need to contact me directly to clarify any issue. Please email me on [email protected] and I will do my best to respond to you.

Thank you.

Sholom Feldman
Managing Director
QUEENSLAND BAUXITE LIMITED