I have mixed feelings about this Transaction Mandate Agreement....

I have mixed feelings about this Transaction Mandate Agreement. The purpose of the Mandate is to identify strategic partners, assist with corporate structures and assist with negotiating and implementing one or more strategic transactions.

The negatives / concerns
It is not clear to me when this agreement was actually entered into. I went back over past announcements and didn't see anything referring to a "Transactions Mandate Agreement". Whilst there is reference in this announcement to a Corporate Advisory Mandate entered into with RM Corporate Finance in July 2024, this Transaction Mandate Agreement seems to be a new agreement that has only just been entered into. However, the Vale agreement is included in this mandate, despite the MoU with Vale being entered into 90 days ago. Therefore, this newly announced Mandate Agreement has a bit of a feel of "let's put in a new agreement so RM Corporate (and others) can get paid a commission on the Vale transaction".

My understanding of the Mandate Agreement is that the commission will be payable to the Iron Bear Unit Trust, not direct to RM Corporate. The unit holders in the Iron Bear Unit Trust are RM Corporate and "entities associated with the management of the Iron Bear Project (including the Directors of the Company and key consultants to the Iron Bear Project)". Come on directors - get your noses out of the trough. Your directors fees, options and bonuses are how you should get paid for doing your job as directors and your job as directors includes identifying strategic partners and negotiating strategic transactions. The same should also apply to other members of management, consultants etc. I'm not against rewarding key people for their performance - but do it transparently and directly related to their role and not part of what feels like a side deal.

I do however note that shareholders will apparently get to vote on whether the directors will get to participate in the Iron Bear Unit Trust - so I guess shareholders will have some say in a similar way to approving various share based bonuses and rewards.

The positives

The period of the agreement is in respect to any binding legal agreement entered into on or before 17 July 2025 (or such later date as agreed). What is the significance of the 17 July 2025 date? It is five months from now. Is therefore something else planned within that time period?

It is common for corporate advisers to be engaged for significant transactions and probably not unusual for their fees to be in the range of 2% to 6%, which is the range of fees for this mandate. Therefore, unless management went it alone, it is likely that there would be an advisor fee paid along the way somewhere. The table of fees is scaled based on the size of the deal/s.



Given the range listed, it is clear that they are considering the possibility of a very large deal - and a deal of such sizes would be good for all shareholders.

Overall comments

RM Corporate have probably played a significant role in helping the company get to where it is now compared to where is was in June 2024.

The 2024 annual report shows that at 30 June 2024 the company has $98k in cash, but had trade payables of $1,254k and a loan of $2,274k payable by 31 December 2024. With no revenue, that is pretty close to being insolvent by many standards.

However, RM Corporate assisted with a short term capital raise and were involved in the more significant capital raise just after the Vale deal was announced. Without RM Corporate's support, there may not have been a listed company today. Therefore, RM Corproate should be rewarded for the risk that they took, the support given to the company and the success that has come from that. However, I presume that received a number of broker options, shares and fees as part of those capital raisings - and that should be their reward for that work.

What is not clear, is who was involved with and responsible for the Vale JV being negotiating and getting it over the line. If it was RM Corporate, then fair that they should share in a commission fees on the deal. But if they weren't directly involved in the Vale deal, then why should they get a fee?

If the Vale agreement was predominantly negotiated directly by management, then I feel that their reward should be reflected through option and share based bonuses.

But in the end, if there is a very significant deal that is done, there will be enough cash to go around for all.