Ann: Response to ASX Aware Query, page-13

What an appalling load of shite to ex-post justify the lack of continuous disclosure. MLX have never pre-empted the quarter's Cu concentrate production before so why do so now under the excuse of power outage if it wasn't true? Regardless, why is the Cu con so much lower than Dec qtr if the power outage was only responsible for 200t of Cu in con? Obviously answer to both questions is that the mine is still struggling and management are as hopeless and arrogant as ever. The komodo dragon effect?

Honestly, reading that ASX query response makes me feel dirty. Glib is one way to put it, arrogantly dismissive spin is another. The first power outage ann clearly laid lower than 'expected' production at the feet of a power outage, and then some 'legacy issues'. "Production for theMarch 2019 quarter is now expected to be in the range of 4,000 tonnes to 4,200 tonnes of copper in concentrate." Not a material disclosure revision event because technically "no specific guidance or production estimate" was ever issued, hahaha... wtf?

Let's go back to the video tape of Dec quarterly.
"Production of 5,177 tonnes of copper contained in concentrate (previous quarter 4,678 tonnes)." and "The strategy at Nifty is to increase copper in concentrate production through the development and introductionof new mining areas outside of the Central Zone"

All the way through the last quarterly is the implication that the increase of Cu con from 4,768t to 5,177t was part of the trend and plan to get to back to profitability and stop the cash bleed. "Improving mine scheduling, sequencing of development, mining cycle-times and stope availability", "Driving operational efficiencies and eliminating bottlenecks in the mine", " Improvedproductivity and efficiency during the quarter was achieved via a reorganisation of jumbo (underground miningdrill rig) development including the acquisition of a new jumbo.", "demonstrated the capability of the mine to achieve the requiredhigher production level"," Improved continuity of production will be enhanced as development continues to moveaway from the Central Zone and additional production fronts are established west, east and north of the CentralZone" The whole quarterly was an exercise in guidance that improvements from the Sep quarter was continuing and ramping up of Cu con form 5,177t into a sustainably higher level.

IMO, if production was going to drop this quarter by over 20% then that is incredibly material given the company is quickly going broke with loss making under-production despite the $50M cap raising. Erything since has been aimed at convincing the market this isn't a bottomless pit that will drag the company down. The reason for continuous disclosure is so that insiders cannot profit from selling or buying shares off the uniformed public.

Let's look at some facts to consider if this drop in march quarterly production is material and should have been released earlier. Below are the last 5 quarters Cu con production, all except the disastrous Mar quarter, were loss making and insufficient to keep cash flow positive, before the never ending capex spend, before labor hire increased by one third.

Dec17 Jan18 Mar18 Sep18 Dec18 Mar
4726 5003 3850 4678 5177 4000-4200?

Sorry, this ASX query defence just doesn;t pass the pub test. A drop back to 4000t cu con after 6 months steady increase in production post $50M extra investment is material and concerning. Same issue stands as before this ASX query; the share price gets sold down by insiders into a late March announcement that production will drop by 20-25%. That sort of production loss doesn't just happen at the end of March or without the company's knowledge. I've worked on many mines, there are production targets and cumulative daily/monthly production charts all over the place to keep the crew focussed on deliverables.

"During the afternoon of 11 March 2019, after an assessment of the duration of the loss of power,combined with an assessment of other operational factors impacting production for the March 2019quarter (which then still had 20 days to run), MLX considered that in aggregate this warranted theannouncement of an estimate of production for the quarter (noting it was not a ‘revision’ of anypreviously announced estimate), to keep the market informed."

lol's... production was probably trending down all month but took a big hit with the power blackout and between the two events everyone knew very well before the market was informed. Pointless rant though, ASX is a toothless tiger and companies can pretend one hundred ways why they didn't think earlier disclosure was necessary. I would have been happier to hear it was all because of the power failure, sorry we were a bit late, rather than worry that after last quarter's high grading efforts there was nothing decent left to mine this quarter. Sorry MLX, alternating good and bad quarters ain't going to stop this boat sinking.... tick, tock

end rant