General Discussion, page-8

On 3 Apr 2020, at 9:11 am, Bob Smythe <[email protected]> wrote:

For Executive Chairman

I first drew your attention to questionable ASX share trading in the CMM shares in my email of 6 March 2020 (copied below). I have added two further examples, see Course of Sales and scroll through the boxes. I have assumed that the coronavirus imposed work practices have slowed down or stopped your intention to addressing my earlier email.

As I and other shareholders have determined, the practice of BOT and short selling are distorting the CMM Share Price (SP) to the advantage of the privileged few. Yes, I am aware that both BOT and short selling are currently legal ASX transactions/activities but being legal does not make them fair. I am also aware that there are two Petitions in progress aimed at having the practice of short selling banned. Both Petitions now have thousands of signatures each - one has 6100 (as at 1 April 20).

As management, your raison d'être is to create wealth for all share holders in a market that provides equal and fair trading conditions. I acknowledge that you will get little help from the ASX and the ineffectiveness of ASIC was recently well documented by the Banking/Financial Services Royal Commission. So what strategies can CMM management implement that will ensure trading (investing) is fair to everyone. Short selling is only effective when all shareholders are not fully or currently informed about the companies activities. A lack of information creates uncertainties which are exploited by those using short selling to their advantage.

Based on the information provided in the QRs etc, when the mine gets into production I would expect the SP to be between $2.00 and $2.40. This rough order of magnitude figure is based on 110Koz/year, profit of $A1400 per oz, circa 500M shares and PE of 7 to 8. My assumptions are: gold price remaining at current $A levels, management not needing to exercise more workarounds to the Corporations Act, no more share issues, no further increases in the 1.1m oz of gold, no changes to the rate of production etc all of which would likely increase the SP proportionally. Based on a rough understanding of the Project Plan and the time to completion; the relationship between the project life cycle and the share price growth, the current value of CMM shares should be circa $1.40 -$1.60 which is in line with the Morningstar estimate of "$1.44 under valued”. As the price of gold in A$s has been rising in recent weeks, the 20-30% fall in the value of the ASX200 should not be used as justification to explain the current CMM SP.

Strategies to Combat Short Selling

The basic functions of management are: planning, directing, controlling and reporting. Presumably, there is a project management plan (PMP) which covers the key activities of: Mine Construction, Exploration Program - Karlawinda, Tramore etc, Funding etc. If kept current, it would provide a progressive update on the percentage complete of each activity and on the overall Plan. If the Plan were put on line it would serve two purposes: keep all shareholders up to-date (reporting) and give management an incentive to perform (control). If a PMP does not exist then it would cost some $1k for the software and about a day of team effort to create the plan and to upload it onto the CMM web site.

If I were the CMM management I would be:

. expediting the mine construction program to achieve an earlier production date, as each production day should generate some $450K /day profit or about $3m/week. So the cost of expediting can be easily offset by the earlier incomes.

. working on the probability that the price of gold will continue rising for the foreseeable future, closely manage the Construction Project Plan's critical path to ensure: 1. no delays and 2. activities are expedited where possible.

. Lobbying the Government to stop the practice of short selling on the ASX and get a broker that does not support BOT and/or short selling

. acknowledging that while short selling is currently legal it is being used in conjunction with BOTs for unfair and maybe illegal outcomes (manipulation of the market) and therefore creates an ‘ethical dilemma’ for management because without "objective morality everything is permissible”.

. making it a No 1 priority to keep all shareholders fully informed of current progress on all major project activities - in addition to the mandatory Reports required by the ASX.

I have watched two other shares in my SMSF “disappear" and as CMM is now a major asset in that Fund, I intend to be more proactive in looking after my interests. Accordingly, I would appreciate your time and effort to respond to this email

I took many of your issues up with CMM Management in April via this email:

On 3 Apr 2020, at 9:11 am, xxxx wrote:

For XXXXXX

I first drew your attention to questionable ASX share trading in the CMM shares in my email of 6 March 2020 (copied below). I have added two further examples, see Course of Sales and scroll through the boxes. I have assumed that the coronavirus imposed work practices have slowed down or stopped your intention to addressing my earlier email. As I and other shareholders have determined, the practice of BOT and short selling are distorting the CMM Share Price (SP) to the advantage of the privileged few. Yes, I am aware that both BOT and short selling are currently legal ASX transactions/activities but being legal does not make them fair. I am also aware that there are two Petitions in progress aimed at having the practice of short selling banned. Both Petitions now have thousands of signatures each - one has 6100 (as at 1 April 20).

As management, your raison d'être is to create wealth for all share holders in a market that provides equal and fair trading conditions. I acknowledge that you will get little help from the ASX and the ineffectiveness of ASIC was recently well documented by the Banking/Financial Services Royal Commission. So what strategies can CMM management implement that will ensure trading (investing) is fair to everyone. Short selling is only effective when all shareholders are not fully or currently informed about the companies activities. A lack of information creates uncertainties which are exploited by those using short selling to their advantage. Based on the information provided in the QRs etc, when the mine gets into production I would expect the SP to be between $2.00 and $2.40. This rough order of magnitude figure is based on 110Koz/year, profit of $A1400 per oz, circa 500M shares and PE of 7 to 8. My assumptions are: gold price remaining at current $A levels, management not needing to exercise more workarounds to the Corporations Act, no more share issues, no further increases in the 1.1m oz of gold, no changes to the rate of production etc all of which would likely increase the SP proportionally. Based on a rough understanding of the Project Plan and the time to completion; the relationship between the project life cycle and the share price growth, the current value of CMM shares should be circa $1.40 -$1.60 which is in line with the Morningstar estimate of "$1.44 under valued”. As the price of gold in A$s has been rising in recent weeks, the 20-30% fall in the value of the ASX200 should not be used as justification to explain the current CMM SP.

Strategies to Combat Short Selling.

The basic functions of management are: planning, directing, controlling and reporting. Presumably, there is a project management plan (PMP) which covers the key activities of: Mine Construction, Exploration Program - Karlawinda, Tramore etc, Funding etc. If kept current, it would provide a progressive update on the percentage complete of each activity and on the overall Plan. If the Plan were put on line it would serve two purposes: keep all shareholders up to-date (reporting) and give management an incentive to perform (control). If a PMP does not exist then it would cost some $1k for the software and about a day of team effort to create the plan and to upload it onto the CMM web site.

If I were the CMM management I would be:.

expediting the mine construction program to achieve an earlier production date, as each production day should generate some $450K /day profit or about $3m/week. So the cost of expediting can be easily offset by the earlier incomes. .
working on the probability that the price of gold will continue rising for the foreseeable future, closely manage the Construction Project Plan's critical path to ensure: 1. no delays and 2. activities are expedited where possible.
Lobbying the Government to stop the practice of short selling on the ASX and get a broker that does not support BOT and/or short selling . acknowledging that while short selling is currently legal it is being used in conjunction with BOTs for unfair and maybe illegal outcomes (manipulation of the market) and therefore creates an ‘ethical dilemma’ for management because without "objective morality everything is permissible”. .
making it a No 1 priority to keep all shareholders fully informed of current progress on all major project activities - in addition to the mandatory Reports required by the ASX.

I have watched two other shares in my SMSF “disappear" and as CMM is now a major asset in that Fund, I intend to be more proactive in looking after my interests. Accordingly, I would appreciate your time and effort to respond to this email. @smythe.net.au>

The response from CMM Management was less than Regal!!

I now value the mature SP at over $3.00+ due to increases in the gold asset; mine life etc etc and consider the current SP to be undervalued: however, those are my views only and readers should do their own research to determine a SP value for CMM.