FULL ARTICLE TAKEN FROM HC POST Great to see a lot of...

FULL ARTICLE TAKEN FROM HC POST
Great to see a lot of Shareholders turned up to yesterdays meeting and the great questions being asked of our Board. I believe the BoD were very forthcoming in the way they responded to the array of questions and have shareholder interests firmly as their priority.....shareholders interested in the long term prospects of the company that is.

Thanks to all the shareholders who have already provided their review of the meeting, it was a vey positive meeting indeed. I had the opportunity to chat to Ben and then Sophia after the meeting and here are my takeaways from the meeting and my chat:

Offtake with SKI
- 13 companies were being communicated with last year in preliminary discussions for Sconi Offtake. BB focussed on Korean and Japanese companies as they tend to partner better.
- SKI selected as they bring lots of advantages due to ability for funding options and 100% offtake
- 2 main conditions on the offtake are ; 1. Project funded by end of 2018, with SKI to have a funding option presented to AUZ by end of Oct, and AUZ in parallel to have independent funding option, which is being managed by Medea. Medea and SKI working with a number of German financiers and banks on debt package options. As others have discussed, funding expected to be a mix of Debt and Equity. Ski gets funding in the low 4% area, so BB said funding will likely be somewhere above that but less than 7%. ; 2. Mining must be commenced by end of 2020 and samples through the new Sconi Plant provided to SKI in Q1 2021.
- SKI needs AUZ, just as much as AUZ needs SKI. Th push is coming from SKI, as they have a contact to supply Mercedes Benz with Co and Ni for 7+6 yrs. That is why the offtake with SKI is the same period, to mirror and be back to back with SKI's deal with MB. MB deal with SKI required SKI to source from non DRC and build a factory in Europe. AUZ will supply 90% of Co and Ni to the ne SKI factory. SKI will source other 10% on market. MB and SKI will make sure the Sconi Project goes ahead, as they are both reliant on the supply from the project. BB said Mercedes wont change their battery chemical formula anytime soon as others have said. Causes too many unknowns with performance and car balance and MB are risk averse and more concerned with their brand than shaving a few $$$ off the price of a battery.

Demonstration Plant
Demo plant has been running since March. Cost $2mil to build and they have since spent another $2mil on optimisations to get the run cycle down to the current 50hrs. About 30 batches have been run so far and a number a samples provided to SKI. BB said he has been waiting to make an announcement until they deliver a large sample. A 180kg sample is planned to be sent to SKI on about the 8 June, so id expect an announcement after that. The sample will be made into a battery by SKI. Independent testing of every batch will be done by a company in Europe as acceptance testing.

Sconi Resource
50,000m drill program to start soon. Will take 3 months. No new tenements expected. The existing tenement is 1500 km squ. We have only drilled about 100 km sq, so still >90% of the tenement remains undrilled, so lots of exploration upside. Current resource is >20 yr mine life. With more drilling very confident of >40yr mine life.

Sconi Plant
SKI will likely be the builder for Sconi. Current estimate is around $500-$700 mil Capex. We will see a better number in the BFS. BFS is on track for announcement before July. So must be in next 4 weeks.

Flemington
The orebody is very similar to Sconi and they have already batch tested ore to confirm. Ore could be processed through Sconi, but that is something to be looked at down the track. Drilling as previously announced in Q2.

Thackaringa
Some good results so far. Happy to let the neighbours lead the way at the moment while we focus on Sconi. Ore is sulphide ore body, not lateritic like Sconi and Flem, so will need its own plant.

Corporate
MLM to be issued $1.5mil of AUZ stock by end of June per the agreement.
WA Copper and Gold Asset spinoff well under way and we will get an update soon. Dominic is running this. When pressed he wouldn't say much as they are working on timing and valuation of the SpinCo. Currently recruiting a CEO and interviews underway. Also recruiting for the senior management for the SpinCo.
Director Fee Pool. Michael confirmed the increase in the Director Pool is for additional Directors. SKI will likely have 1 director when the 19.9% option taken up.


So my summary of all of that...….they are all very busy doing what they said they will do from the AGM last year and I think we will be seeing a stream of news announcements in the coming 6 months (which will be subject to far greater scrutiny from the ASX because we are ow in one of the main indexes....BB said he wasn't forwarned of this and found out the day we did, which caused the trouble with the suspensions..great he was very open and honest and put his hand up to say he could have done better).