2018 AGM Report - follow up to HC questions and other...

2018 AGM Report - follow up to HC questions and other ramblings

In answer to some of the questions and comments regarding the AGM a few follow-up comments.

VIMSON - I too was surprised that there were no questions on this, but I need to set the scene from the meeting a little. 

By the time the Vimson resolution came (first time was resolution 5) the meeting was already very tense.  I would guess we spent around 30 minutes on resolution 1 with some hard questions from the Browns and others in the room as mentioned in my report.  This started some tension between Rex and Paul Brown which lasted the duration of the meeting.  At this time I heard a share holder say something along the lines of 'This meeting is going to go all day' as there was quite a bit of back and forth. 

By the time that resolution 5 came around things had dragged on a bit (read a LOT) and parties were already a bit hot under the collar and probably a bit spent.  Another contributing factor may have been the proxy votes already being known and on the screen (I may stand corrected on this) and the result was overwhelmingly in support of the motion.  That the best I can do on this, but you really did have to be there to understand this.

Corporate -  At some stage of the meeting Paul Brown was questioning the level of corporate resources that were available.  There was some frustration that PB was spread very thin, a view which I very much share.  There was a request put to the directors that the corporate team is beefed up with more resources to handle PR and IR.  At this stage Rex acknowledged Paul Browns background in this field and suggested that he may like to assist in the appointment of such a person.  Things were a bit tense between Rex and  Paul Brown by this stage, but I believe that this was a genuine request.  

There was some discussion / acknowledgment that shareholder communications could be improved.  I totally believe this is the correct.  PB has had a big work load and lots of travel over the past year (spread way too thin in my opinion), a good PR / IR person should be appointed to sort out our company announcements that I have previously complained about having too many typo's / cut and paste errors (although this may be an overlap of the Company Secretary, maybe changes are needed here).  This person should be the person to field shareholder inquiries and where necessary get the information from PB.  Frankly we pay PB too much money to spend his time on dealing with investor relations, yes he needs to direct the communications and provide the info but we need someone in the office in Perth to take our calls and field email queries in a timely manner.  A lot of the frustration that I read on HC comes from being unable to contact PB.  As mentioned I don't want my MD sending lots of time liaising with aggrieved shareholders - I want him delivering Mt. Peake!

Market Cap  / NPV Delta - Firstly let me touch on the NPV, there was a question about this.  PB mentioned the $4.7B NPV (mid 2017 from memory) and advised that Vanadium pricing had increased significantly since then.  He indicated that if re-modeled that the NPV would be significantly higher.

On the question of the languishing Market Cap in relation to the Mt. Peake NPV (I'm not 100% sure who asked this question, possibly Paul Brown) PB mentioned a number of factors.  Firstly the perceived risk of the project - which has largely been mitigated this year, there was a comment about the lack of appreciation for Vanadium in Australia, PB mentioned that he spent lots of time in Hong Kong and London as Vanadium was more revered in these territorys.  

Finance closure time - My notes and memory don't have any specific time frame, but there was a lot of confidence from both Rex and PB regarding this.  Most of the confidence related to KfW.  From speaking with another shareholder who had spoken to SMS, their take was that SMS were MEGA excited about Tivan - the word disruptive was mentioned.  I kind of get the idea that SMS want to get this project built for themselves more than TNG as they will be positioned to totally disrupt the Titanium (pigment supply chain) with their processing plants (this also giving TNG Tivan royalties).  It has was mentioned at the meeting that world Ilmenite supplies are dwindling and that with global warming protective coatings (Paint containing Ti sourced pigment) demand will increase at a time when the raw materials for production are becoming scarce.  The Titano Magnetite deposits at Mt Peake and similar are in my opinion are not at all exciting maybe even worthless without the technology to take several products from the ore.  I've digressed, but SMS appear to have a good track record with KfW and I don't think that SMS giving TNG a product guarantee is a coincidence - my instinct is that it may be there to give KfW the certainty that they need to fork out the cash for the project.  The company was noncommittal about a finance date but when questioned whether the Refinery EIS would slow things down the answer was a definite NO, which told me things were advanced.

Browns - I had not met the Browns prior to the meeting but I had obviously read a lot about them on HC.  Warren came across as a mature gentleman who was obviously very astute, but is a quieter reserved character.  I got the idea that he was very much retired and not keenly active in business.  I don't recall Warren speaking at the meeting.  Paul Brown came across as very much in charge of the family's TNG shares and was a sharp and astute businessman.  He was well researched coming into the meeting citing many items from the Annual report that most of us wouldn't have skimmed.  I got the impression that he did not come from a back ground in mining however.  

It was clear from Paul Browns questions that they were not in possession of any greater understanding of the companies working's than the rest of us.

The relationship between Paul Brown and Rex appeared pretty tense (partly expected given 249d process) but I did notice that they were in discussions after the meeting.  Hopefully this relationship improves.  I did not notice the same level of tension between Paul Brown and Paul Burton.

After Meeting Chit Chat - By the close of the meeting the tension had largely dissipated and the mood was definitely positive and upbeat.  The directors were all actively mingling after the meeting and all appeared very approachable and happy to discuss any topic.  I found PB particularly open and keen to listen.  For the record my comments from the report are from the public component of the meeting and not from private discussions with PB (private discussions don't belong on public forums). 

There was a specific question regarding the Browns discussions with Directors after the meeting and as above this did happen.  Hopefully this relationship improves.

The 249d has been and failed.  We need to move on and get positive about this project.  I supported the motion, but it is now time to move on.  I am totally satisfied that the message has been received by the company and I expect to see a new chair in place before the next AGM and likely well before then.  More importantly I expect the company to have finance for Mt. Peake well before the next AGM.

I'm happy to try to answer any other questions regarding the meeting.