General Discussion, page-377

My apologies for overestimating the level of knowledge of the target audience, and thus the requirement of supporting "evidence" on such a well-known topic. You want it spelled out in detail with supporting evidence. I can do that. So here goes. All based on what we have been told.

At end of second quarter debts, calculated on what we have been told, will be about $30 million. See reference below.

How is this debt going to be serviced? The boss says that there are no creditors of concern and that the project will go ahead. We have to take him at his word.

IMO, one of three ways - equity, debt, or securities.

Equity:

This would result in a share placement of approximately $30 million. Based on past experience my best guess would be that it would be either EECP or DL.

Bear in mind previous cap raising was achieved at a discount to the then share price. e.g.

1. EECP - 5 January 2021 - $18 million - 10% discount to the average of the five-day VWAP in the last 20 days trading.
2. CR - 15 June 2021 - $18 million - 2106% discount to the average of the five-day VWAP.
3. DL- 23 June 2022 - $15.4 million - 15 cents per when market share price was approximately 18 cents per share.
4. Private Share Placement - 24 October 2022 - $3.76 million - 15% discount to the average of the five-day VWAP.
5. Private Share Placement - 06 March 2023 - $1.4 million - 11% premium to closing share Price on 03 March 2023.

Based on the above historical events, if DL or anyone else for that matter, the share price, at a discount to the current market price, would put it at no more than about 6 cents per share. IMO.

Dilution. $30 million/$0.06 = 500,000,000 additional shares on issue. That is the afore mentioned "sledgehammer like no other" and "putting a cap on the share price in the medium term", that apparently disturbs delicate sensibilities. The longer they procrastinate the worse it might become.

As for debt, or securities. Who would lend $30 million on an unsecured loan in a nonproductive company, or offer notes or a combination of both, without enormous interest rates. IMO, it won't happen, too expensive. If this were to happen, I believe it would be an act of desperation.

The above is the information on which I base my conclusions.

I think a TO at about twelve cents per share by this "potential partner" would be ideal.

I accept that many will not agree with me, buts that's life. J L.




Reference material below.

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