Apologies if any of the following content has been clarified...

Apologies if any of the following content has been clarified during the Company's webinar, I wasn't available to sit in but nor did I want to as I find them to increase frustration levels due to the usual answering a question without actually answering the question!!

I cannot understand all the anger and/or surprise at the estimated $0.13 - $0.16 per share via a Return of Capital.
The Company previously announced its intentions, but I can also somewhat understand the expectations was for of a greater value as the amount of tax payable was unknown but the return was flagged as "the net after-tax proceeds", the amount of tax may have caught some off guard?

~ Capital gains tax is payable on any Licence Transfers and isn't new, it is in all the mining codes, the amount payable is no real surprise either consider Leo Lithium has a low cost basis.

Capital Management Plan

• A capital return to shareholders is a priority for Leo Lithium. The Board has considered feedback from shareholders and will commit to returning, in full, the net after - tax proceeds of the Tranche 1 Consideration to shareholders once the transaction completes, first funds are received and receipt of a tax ruling from the ATO.
• The Company is seeking taxation advice on the disbursement, and more details will be provided in due course as to the expected value on a per share basis.

Transaction to sell the remaining 40% of Goulamina

Is this a good result? absolutely not!

• after being a shareholder of FFX and (by default via an in-specie distribution /rights issue) of LLL for a long time, my expectations were a lot higher than what the proceeds of the transaction will provide
• nor is it a good result for shareholders that also purchased pro rata shares in the company at IPO @ $0.70
• nor for the shareholders that purchased shares on market up to its high of $1.2

Is this a good outcome?
Given what has transpired over the previous year with negotiations ultimately reaching an impasse with the Government of Mali, in my opinion, the sale was the only result that would see shareholders getting some value returned from their investment.

Would 26% of the Goulamina project be better than what we sold the 40% share for, absolutely not and my opinion is based on;

• the project being forced onto the 2023 Mining Code, some can say that Ganfeng and GoM are still negotiating but I would think it is a done deal given the joint press release by the Ministry of Economy and Finance & the Ministry of Mines;
• "(sic) inform the national and international public that, following a series of negotiations, the State of Mali has concluded an agreement with Ganfeng Lithium Co, Leo Lithium and Firefinch for the resolution of the Morila crisis and on the other hand the operation of Goulamina lithium. The crisis was due to the serious shortcomings in the management of the Morila gold mine attributed to Firefinch and the implications of the Goulamina lithium mining mine.

• "The conclusion of this agreement, which is the conclusion of the renegotiation of the Goulamina Lithium Contract, in accordance with the Mining Code of 2023, has raised the participation of State and National to 35% versus 20% earlier. The increased participation of the State and the application of other provisions of the new Mining Code will among other things, allow;
• the increase in the contributions of the mining sector to the State budget;
• significantadditional contributions to the financing;
• of the development of the Mining and Energy sectors;
• Geological Research, Capacity Building & Training Fund
• also finances activities to control innovation in the mining sectors, such as study trips
• funded by holders of small & large mine operating permits being the beneficiaries of industrial exploitation authorisation for quarry substances up to .5% of quarterly turnover
• of the development of the infrastructure and transport sectors,
• Energy, Water & Transport Infrastructure Development Fund
• funded by holders of small & large mine operating permits being the beneficiaries of industrial exploitation authorization for quarry substances up to 1% of quarterly turnover and 10% of the royalty Ad-valorem tax for the first 5 years from the date of first production;
• the rate of 1% is increased to 2.25% therein after

• local development fund;
• to finance national, regional and municipal plans;
• funded by holders of exploitation permits @ 0.75% of quarterly turnover

• Customs Regime additional costs (values unknown)
• Community Solidarity levy; Community Levy; any new tax of Community origin are all collected at the Customs cordon.

• Rehabilitation / Closure, (correction appreciated if this is incorrect) - currently, rehabilitation costs are shown only in the Annual Financial reports as "Provision for rehabilitation".
• Under the 2023 Mining Code, an escrow account is set up and funds are paid into this, calculated in C3 costs (from updated DFS) at US$0.80 or A$1.18 per tonne of concentrate, indexed yearly and reviewed every 3 years or if substantial changes occur. This equates to US$400,000 per annum (based on stage 1 production at name plate) into the escrow account (managed by the state) and begin on first production.

• This is just the monetary portion, it doesn't include;
• the need for an updated EISA?
• restoration plan
• monitoring committee
• Other than the above additional funding costs, the removal of the tax incentives or "3 year tax holiday" (Corporate, VAT & Import) will impact the viability of the project further.
• Exploitation Licence reduced from 30 years to 12 years with the option to renew, but given the performance of the Government, I would suspect that would see further changes (new mining codes) on applying for a renewal?

Really have to love this at the end of the press release!!!!!

• "The Government of Mali assures Ganfeng Lithium Co, as well as all stakeholders in the mining sector of its willingness to encourage and guarantee a win-win partnership with all investors."

• the Government's participation;
• free carry changes from (2012) in height 10% to a minimum (2023) of 10%, which is suggestive that they may try to negotiate and increase in their free carried interest;
• option to purchase 10% (2012) increases to option to purchase 20% (2023) obviously dependent on the free carry component;

• The 5% to Nationals has always been there; it remains open for National private investors the possibility of acquiring (in cash) at least 5% (2012) - in the 2023 code, the 5% is held by the government to decide who acquires part or all of it.

• option to purchase 10% (2012) at fair market value ^{footnote 1} US$85.6 million (using the 40% Sale figure of US$342.7) changes to, option to purchase 20% + 5% x overall cost of exploration/research + Feasibility Study ^{footnote 2}which would mean any costs post 16 June 2021 will not be part of the State's cost calculations^{Footnote 3}.
• the States option to purchase cannot be foreclosed.

• additional costs of transitioning to the provisions of the new Local Content Laws, include but are not limited to;
• requirements to insure all mining activities via locally approved insurers (where the amount of cover exceeds the insurer's financial capacity, the insurer can (but not obliged to) seek re-insurance from a foreign company) with the large scale Goulamina project this could be problematic and impact viability.

cheers

Foot notes:

1. "fair market value" to be determined by an independent firm.
2. Cost of exploration / research + feasibility study + increased by interest (at BCEAO + 2%) over the period until the decision to implement into operation. The expenses (also increasing by interest at the same rate) for research work conducted by the State within the perimeter are deducted from the acquisition price for the cash participation acquired by the State. The tax expenditures, or exemptions granted by the State to the holder of the research permit and to its subcontractors on the area covered by this exploitation will also be deducted from the amounts paid.
3. Decision to enter into Joint Venture with Ganfeng to develop (implement) the Goulamina Lithium Project was announced 16 June 2021, so I will assume that the option to purchase calculations will be taken from the original DFS? https://announcements.asx.com.au/asxpdf/20210616/pdf/44xf0by4x0f07q.pdf