AGM

At the AGM several interesting questions were asked.  Here is my take on the more interesting ones:

Insurance claim: The claim associated with the seawall failure is being finalised this quarter.  Even though the event was about a year ago, MGX were covered for 12 months' operational loss which has only recently closed off.  As suggested in the AGM preso, the insurance claim is likely to be successful, given the $1.85M contingency payment already made, but the CEO declined to put a number on the total value of the claim.  There are 27 sub-insurers involved, so this may take a little while! (my view is it will be several $10's millions).

The litigation against GHD is being driven by the insurers in the name of MGX and is a normal outcome of the claim.  Interestingly, if the law suit results in a payout larger than the insurance claim, MGX picks up the excess.

It is not a given that mining will resume at KI on the payment of the insurance.  Rather, KI's viability will be measured against alternative investment opportunities.  Having said that, the work done there to date (see below) will likely make KI a lower cost operation.

View on returning excess capital to shareholders: MGX believes they can maximise shareholder's returns by employing their war chest to build the existing IO operations and seeking other mineral commodity opportunities.  Capital works (pre-strip and equipment) undertaken at KI are not wasted because of the seawall failure. The Board reviews capital management monthly and so far believes there is still a good business to be had (in spite of razor thin margins, a statistical certainty that the company will eventually fold with no capital return being made, and a year by year declining treasury! - IMO)

KI as a logistics hub: work on attracting Browse Basin O&G operators continues, but it was clear that this is a relatively low profile opportunity.

Profitability: reduction in costs against a broad range of cost centres gives the management faith that the operations will be profitable in the coming year - as in fact they were now but for one-offs.  Indeed, it was stated if two shipments of ore went out on time, rather than being delayed by Geraldton's seasonal surge tides, another c$8M profit would have been added to the bottom line.

MGX has not got long lived resources, with a couple to a few year's of IO operations left.  Privately, the CEO talked about his base metal credentials and MGX possibly pursuing copper/gold, zinc.....  in Australia.  There were no attractive IO projects being looked at with even their Shine IO deposit mothballed for the foreseeable future.  Iron Hill, <3km south of Extension Hill, will be developed as a low CAPEX trucking operation.

It was also revealed that rail capacity upgrades mean there is a "virtual take or pay" contract on the EH - Geraldton line further adding to the unattractiveness of a total IO shut down.

All AGM resolutions were passed by greater than 90%.