Ann: Update on Corporate Review and Management Changes, page-354

7.2 Adviser options

On 22 August 2016, a director of the Company signed a document from Merchant Corporate Pty Ltd
(Merchant) entitled a “China Engagement Mandate with Birimian Limited and Merchant Corporate”.
The document was also signed by MineMark Global (MineMark). The document bears the statement
that it is a “High Level Term Sheet for Discussion Purposes Only”. The Company considers that it is,
at best, an agreement to agree and that it does not give rise to any enforceable obligations on the
Company or any other entity.
This document stated that the Company would, if Merchant and MineMark secured a “Memorandum
of Understanding (MOU) for offtake and possibly subsequent investment” in the Company, grant
9,000,000 options at an exercise price determined by reference to the 60-day VWAP as at 26 August
2016 and each option would be for a term of 2 years. The document and its contents were not
announced to the market, notwithstanding that it purported to contain an agreement to issue
securities.
The Company has entered into two non-binding memoranda of understanding to cooperate and work
towards an offtake arrangement with two separate Chinese parties being Tongdow E-Commerce
Group Co., Ltd (Tongdow) (BGS 31 October 2016) and Far East First Energy 6008.69.5 SA (First
Battery) (BGS 20 December 2016). After entering into the first non-binding memorandum of
understanding, the Company granted 4,500,000 of the 9,000,000 options with an exercise price of
$0.316 and an expiry date of 1 December 2018 to nominees of MineMark. Your Directors believe the
Company had no legal obligation to grant any of the options including the remaining 4,500,000
options. The party which claimed to be entitled to the further 4,500,000 options has accepted
Birimian’s position with respect to the Company being under no obligation to grant these additional Options.


Does this mean that the nominees of MineMark are holding 4,500,000 options that could or should be in dispute. Birimian’s position with respect to the Company being under no obligation to grant these additional Options should be in a position to cancel the options unless this decision is in dispute?

I for one will be watching the outcome of this potential dispute as 4.5 mil options is not to be sneezed at.