Ann: Successful A$35 Million Placement to Fund Company Growth, page-20

IMO this deal is finally showing some respect for shareholders. As many have pointed out, the status quo does not work. It's a pathway to disaster and change is needed and showing respect for shareholders is implementing the changes required. One of these changes (DMS) requires a good chunk of capital and eating a few rats. A rat to unfortunately eat is raising capital at a lower price than the last one. Annoying but necessary.

E25 has a massively positive NPV project in its HPMSM. A revised estimate will be available soon, but the January scoping study put the 100ktpa undiscounted cashflow at US$141m per year. This is a project shareholders want to proceed (with the proviso that the economics continue to be robust as this project goes through further, more detailed studies). What a set of financial accounts unfortunately does not show is the cost of delays. If this project HPMSM does have the potential to be delivered and operational in 2025 but gets delayed to 2026, that just cost shareholders US$141m of earnings that will never be recovered.

Delaying high-value projects and not implementing them in a robust manner - that is not showing respect to shareholders. If this capital raise removes barriers to HPMSM and assists to keep on-track for timelines, then it is showing respect to shareholders.

This raise now creates a cascading series of events. It provides the capital to fix the ore operation (and hopefully a prompt decision is made around this, not a capital raise and wait ages!!). This should stop the bleeding and provide additional volume and hopefully, cash flow. The volume is important because it shows that the quantity of ore needed as a source material for HPMSM can be/is being delivered by the existing operation. That's going to be important as investors look at funding the capital for the HPMSM.

It will also assist to provide confidence that E25 is serious about implementation which may help close deals that are being discussed.

There will be more posts about the current state, existing operation profitability but this capital raise helps E25 look forward and that is where the value is.