QBL AGM Summary

Sorry it has taken so long but I literally wrote every word and just needed to put it all together.

In attendance were Sholom, Pnina and QBL's chief geologist. Below are summaries from Sholom based on questions I and others asked.

Overview of past few weeks
We had released the results of our SS 2 weeks ago and were going to immediately follow that with an upgrade of part of our resource to an indicated status. Our geologist has great confidence in the results. Our resource like all bauxite resources are made up of varying qualities due to the sheer size of the tenement. We should be able to either ship high grade directly or even ship blended lower grades. Based on Chinas problem of not having enough Bauxite and their difficulties mining their own projects, we are exploring both avenues. We are very confident as there is probably nowhere in the world more convenient for China to get Bauxite outside of north Queensland. It is reported that China need 35m additional tonnes next year which they dont appear to have a source for. Even 1m tonnes per annum is only a fraction of that gap. What we have is a resource that may potentially be ready to be mined in 2015. As far as the grades go, even lower grade bauxite will be marketable based on our discussions with industry experts. As an example China is currently commonly using a AL/Silica ratio of 5:1. as we have already reported, we have areas with grades that average higher than 10:1 AL/Si ratio. This leads us to the recent interest that has been shown to us from potential offtake parties.

Offtakes
We have been approached by a number of potential off take partners and we are very confident that we wont have to take the first offer. We should have the ability to select the best offtake due to the increasing demand of Bauxite and the number of unsolicited approaches we have received. One refinery said if your bauxite is on a ship today we would buy it all today!!!!! We will try to do the first deal that we believe is in the long term interests of our company.

Upgrading the resource
We have been the source of a lot of speculation in the market and have been required a number of times over the past year by the ASX to stop the trading in our company until results are in and finalised. As we had results still coming in we needed to wait until it’s all ready to go in one announcement. We had an initial upgrade which we wanted to announce and now we are looking to upgrade that again. The asx had seen the ss before we released it and we had gone back and forth before we released and they were happy with it to go. We were going to immediately report a resource upgrade which has now taken considerably longer than we had initially expected and therefore the current suspension. The asx are working with us and want us to succeed however they are doing their job and want to ensure all the i's are dotted when we put out this announcement.

How did you come up with 55 a ton.
We had consulted with a number of industry experts as part of the independent scoping study that looked at a number of factors and compared what others in bauxite are charging, AL/Silica ratio and other factors and the number reached was $55 a ton. Ultimately, the bauxite market is not as transparent as other commodities, there are many factors that are considered in individual deposits that affect the price, no two deposits are exactly the same, so we can only be guided by the industry experts until we have actually signed with an off taker. that will ultimately be the determining factor of the price. The analysts are quite bullish that next year prices will be even higher than the current values. The fall of the Australian Dollar is also quite beneficial for Australian miners. The Free Trade Agreement with China is likely also a big positive for future business with China.

Have u spoken to gov about mining license?
We are actively speaking to the government departments already and they are keen to see this happen quickly and we are confident that this should happen relatively quickly after the indicated resource comes out.

As a general principle how will u raise capital for phase 1?
Whatever is going to give the company the best outcome. Even through an offtake partner is a strong possibility. We aren’t talking about a lot of money only around $5m. To raise that amount from the market at the right price for the company is also a good possibility. We will try to do the best deal for the company to raise this capital over the coming months. Project finance may also be an option.

My overall observation of Sholom was very positive. I was very impressed with his passion and dedication to the project. I for one am comfortable where the company is at and look forward to the upgrade of the resource (whenever that happens).