I have looked carefully at the sequence of announcements from a...

I have looked carefully at the sequence of announcements from a year ago and many tend to jump to conclusions about the future of CXO by painting a doom and gloom picture. Goldman Sachs has been a key player to this and their irresponsible reports in my view should be discounted as have an agenda and motive which drives their cause.

Any production company will have some teething problems which will affect the performance of the company and result in actuals falling short of forecast. It was unfortunate that as soon as production commenced, senior management left the company and the current management has had to deal with the problems. It is unproductive to point fingers at whose fault it was and what is more important is to move forward. Unfortunately lithium prices have fallen substantially and costs have gone up. This is faced by all lithium producers. Current management has to make decisions which may not be popular to shareholders but such decisions are necessary for the future and progress of the company.I would suggest that shareholders study the first quarterly activities and cash flow reports and the site visit presentation dated 16 November 2023, to get an idea of what the new management has had to deal with and what has been done to-date. In my view they should be commended for the work put in and I do truly believe that the company is in good hands.

There are a few obstacles which are currently being dealt with and one of them is the concentrate percentage which, when they had an agreement with Yahua of 300k tons over 4 years the concentrate % was 6%. While they have tried to raise the % up, it is currently between 5.2-5.4% levels. It may take some time to progress to the 6% levels, management in the meantime have been able to get a buyer’s minimum acceptance grade of 4.5% and plant recoveries are a priority. A lower grade would also mean a lower price.

Northern Territories, being in the Tropics is prone to monsoonal rains and as such this would affect mining operations. Management have had to overcome season preparedness which is well progressed and includes haul road upgrades and investment in water storage facilities and new dewatering equipment and design modifications. Site works are well under way. This would result in capital expenditure and this has been facilitated through the capital raise. I am sure that the capital raise price is a bone of contention, however bearing in mind, it beats borrowing and having to deal with high interest costs.

There are some who reckon that there will be a further capital raise, however the cash position as at the end of 30 September 2023 stands at $202M. This appears adequate especially when they have increased production, recovery percentages and making shipments. Their costs have also been controlled and despite current lithium prices being low they are able to reduce cash outflows through implementing efficiencies and perhaps be able to be cash achieve inflows of cash with regular shipments of concentrates and fines.The current price of the share is greatly undervalued and the manipulators should be well aware of this as they could be burned in forcing prices down to levels that do not reflect the value of the company. Green energy is the battle cry for this century and we cannot expect to see it being supressed for long, bearing in mind the demand will continue to grow as the current producers are not many and it may take a number of years for production to meet demand.