Few Points from the AGM, page-26

It's been very well summed up already by the combination of posts above, but to add/expand on/reconfirm some points:

1) Huayou will not be privy to any deals being negotiated with other potential partners until a formal offer is made. If any deals are to be spoken of in a Board meeting, Chen will be asked to step outside. Once an offer has been made, Huayou will be given the chance to match it or, ideally, better it.

Somewhat contrary to the other reports I've read, to me Nigel did not seem convinced that Huayou would be executing their options as things currently stand, or at least not before additional funding will be required. However, he was confident that if Huayou were approached they would be willing to provide more funds, but likely at renegotiated terms.

2) I got the impression that the funding issue was very close to be resolved and that we will be seeing that announcement before year's end. Nigel mentioned wanting it out of the way by Christmas, and if they haven't yet approached Huayou, as well as knocked back a recent offer from Cantor Fitzgerald (who previously invested $15m @ 25c) which was deemed unreasonable, then it stands to reason they have something else up their sleeves.

Nigel mentioned their preference being an offtake partner or cornerstone investor - that will add value to shareholders - rather than a simple equity raise. They appeared to be in advanced discussions with more than one party.

3) The North Americans (or at least Cantor) were not aware of Manono before being approached by JNS Capital. Nigel mentioned that, in his opinion, what JNS have done raising AVZ's profile in North America has come at very cheap cost to the company.

He admitted that nobody on the BoD had the Chinese connections that Airguide have and that, while he believes they would have gotten there themselves eventually, Airguide have greatly sped up the discussion process for AVZ. Nigel had also just gotten back from China last month (or was it last week?) and is heading back there next month.

What the Board do have to offer though is DRC connections, and they are confident they will have no issues with licensing and permitting. The application process to go from an exploration license to an exploitation license takes about 2 months, but the Governor is very motivated to see the Manono Project go ahead and they do not foresee any hurdles, and do foresee several concessions.

Manono used to be the third largest town in the DRC, and the Governor wants to see the region returned to its former glory, with the first new major project being AVZ's.

4) The 2Mtpa scoping study allowed for the use of diesel generators because they know it will be a reliable power source, but ultimately operating costs will come down once the Piana Mwanga hydropower station is up and running again. At present, it is completely defunct and all the copper has been stripped out of it.

I believe the comment regarding the A$10m to get one turbine operational was to say that this would replace the need for diesel generators if AVZ had to refurbish it themselves, and that this could be accommodated in the $36m Opex contingency. It may also have meant if they paid for one turbine, they would have exclusive/priority use of it.

80% of existing power lines are believed to still be in satisfactory condition, and the cost to replace the other 20% is included in the $10m estimate. Although the 5Mtpa and 10Mtpa scoping studies aren't yet completed, Nigel believes that 5Mtpa will prove to be the sweet spot in terms of the what the near-term infrastructure will be able to support from Manono.

5) Drilling for now has ceased, but Nigel was of the opinion that if they had kept drilling they would have ended up proving a 1Bt resource in Roche Dure alone, which isn't exactly necessary. The 6 holes recently drilled into Carriere De L'est also appear to suggest it could be of a similar size and grade to Roche Dure.

I don't believe they have plans right now to drill Carriere out any further (although Nigel did say that 2 rigs were still on site), but 3 or 4 holes was all it took to convince the market what was in the ground at Roche Dure in the 2017 drill campaign (granted it was also reconfirming results of the shallow drill campaign carried out in ~1950), and the 1 hole sunk into Carriere De L'este then proved to be the biggest hit of that campaign.

The market had already expected the great results so far of the 2018 drill campaign, but there could be some significant upside to these next results from Carriere.

6) There is approx. 2.5-3m litres of water in the Roche Dure pit. Rhett and Graeme are currently investigating/arranging for this to be pumped out, which is expected to take 3-4 months. Once they are in there they intend to do some blasting. I'm not great on my mining knowledge, and was also distracted at this point, but I do recall reference to the pegmatite being extremely hard (hence the need for blasting?) and that the walls of the old pit appear to be angled at ~75 degrees.

The main point I took from this discussion was that the new pit walls are expected to be near vertical and to support themselves very well.