Corporate Restructure, page-15

Agree with your sentiments Tedhunter.

We all need to take a step back and analyze the situation.

When AUZ/SKI signed the Offtake agreement in Feb 2018, SP was circa 10-11c. $80m of Options at 12c made sense at that time. Delays in a project of this size are not abnormal. Larger forces uncontrollable by the BOD have kept down the SP of AUZ and numerous other companies that are deemed to be “disrupters”. SKI could not take up the options at a 200% premium. “Saving Face” in Asia is part of the DNA. AUZ was hopeful that the SP would climb with the excellent news releases over the past
months and resultant uptake of Options and a cash injection of $80m. This did not happen. AUZ need working capital and have no choice but to raise capital. They cannot trade insolvent. They had to do what they had to do. STP for LTG (Short Term Pain for Long Term Gain).

There is always the possibility that SKI will advance a loan to AUZ to Pre-order the autoclaves to ensure that the project is not unduly delayed. The ownership of autoclaves could be collateral if need be. There could be a lot happening behind the scenes that we do not know. Even under this optimistic scenario, AUZ would need working capital and therefore the resultant CR.

So let’s now think of the worst case situation. AUZ are unable to get funding to start the project even after the release of the optimized BFS. Do we really think there will be no suitors for a TO for a highly feasible cobalt nickel mine rated amongst the top 10 in the world?

KEEP THE FAITH

GLTAH