Ann: Appendix 3B, page-23

As I have said I personally didn't think they would raise a single dollar with the SPP. We touched 1.5c the day before the CR announcement and the only reason there was only $15k raised is because someone pushed down the price to make sure that was exactly what happened.

The question in my mind is why we were actually sitting at 1.5c in the first place. The reason for this, I believe is that quite simply "Coal" as people like to lump both Metallurgical and Thermal variations into, is, at this present time, on the nose. People generally have no idea that Coking Coal is used for Steel manufacture and that the current push from the faceless men into renewable energy does not replace the Coal in steel manufacturing. But we get lumped with the same problems because coal is coal...

When we mixed this Coal negativity with the news stream coming out of NAE we see that the majority of the news was in regards to Lochinvar Coking Coal project. Coal news was ignored and so our share price just drifted lower as share prices do without a steady flow of good news. We also have Brexit uncertainty and the fact that small cap shares on the ASX are taking a hammering of late. (Common New Financial Year )

Now Management has been trying to Sell/JV/Fund Lochinvar over recent times and obviously has not got very far despite the report looking very strong. They would have received feedback during this time and I believe a part of that feedback would have been to lower the cost/time to production. Now despite having money in the bank, this is likely allocated to fund day to day operations, not a drilling program. We also know that the share price was dropping for no real reason, so management made a call to place a CR before they could no longer do one to raise some funds to achieve the results needed with Lochinvar to gain more interest for a Sale/JV/Funding.

Did management know that it would fail? Who knows. Should they have known it would fail? Yes, of course. They did however manage to place 20 mil shares at 1.5c and in the short term I expect the share price to rise above this level and for 1.5c to become a floor that we are likely to stay above for a longer period of time. My guess is that if they could have offered more to the investors via CR they would have, but that was the maximum allowed. Without this CR I believe we would have drifted lower until some news regarding Redmoor drilling, so I don't see it as all bad.

My question is, what should management have done? Just left Lochinvar sitting idle? Tried harder to sell it? We don't know specifics so hard to know their plans. More importantly what will they do now?

The good news is, Redmoor is NOT coal. Our JV partner's shareholders see the potential this project has and they have been rewarded with staggering share price growth. Time and patience is needed for NAE shareholders, but we will get there. If there was no potential our biggest shareholders would have sold and left long ago.

All IMO of course. But that's my thought process and why I will continue to hold.