ASX/ASIC, page-4

Thought about contacting SGX listed companies to try and initiate a sale.

Their first step would be an assessment of GMC's "assets":

1. Gulf will be granted, under Tax Holiday Regulations, a 100% tax relief facility for 10 years following which tax reduction of 50% for a further 2 years.

2. The granting of the Principle Licence is a singularly major step to commence building our Timor Smelter.

3. A Memorandum of Understanding and 30-year Lease Agreement was made with the local community landowners and the land officially measured and issued a field map reference catalogue number in preparation for the approval process with the local Regency being completed.

4. Gulf has an agreement to purchase two furnaces (including related equipment), from Transalloys for the total cash consideration of US$1 million.

5. Gulf has also agreed to supply Transalloys with up to 30,000tpa of high grade manganese ore at the current reported Metal Bulletin’s index price for manganese lumpy, for a period of three years (once export licenses have been granted.

6. GMC is pleased to advise that it has received approval from the Governor of East Nusa Tenggara for the construction of a Manganese Smelting Hub in the Bolok Industrial Estate in Kupang, Indonesia.

7. Gulf is pleased to advise that it has signed an offtake agreement with Renova Group
(“Renova”) for the sale of up to 60% of manganese alloy produced from the Kupang Smelting Hub during the first three years of production.

8. Gulf is also pleased to advise that XRAM has been appointed as the EPCM contractor, to deliver the Kupang Smelting Project. The EPCM contract value is USD14.5 million.

9. The feasibility study

Summary:
1. Tax relief - anyone that meets the THR can be granted this
2. Principle Licence to commence building
3. MoU in preparation for approval
4. Agreement to purchase 2 furnaces
5. Agreement to supply 30,000tpa (following export licenses)
6. Approval for construction
7. Offtake for sale of 60% produced alloy
8. EPCM contract
9. Feasibility study

Realistically, the only "assets" are that GMC have approvals for construction (based on what they have told us). And they have two 3-year offtake agreements, but the term of 3 years is not even long enough to be considered bankable.

GMC are missing the two main things that I believe a buyer would be looking for:

1. They have no manganese agreements from local suppliers to be processed in the Kupang Smelter. GMC do not own any manganese resource or reserve, which is why you can't just look at the price of manganese in isolation as GMC are still required to purchase the unprocessed ore (whose price will be extremely correlated to the manganese price). Its surprising that management even refer to the manganese price movement in the absence of a manganese reserve or fixed price contract with a local supplier of unprocessed ore.

2. GMC have no cash, and the upfront capex requirement for the entire project is around $66M USD (refer to Timor Smelter Project Update), so the buyer would need to contribute $66M USD as well as any purchase price consideration.



I think we should be prepared for a very hard landing tomorrow, and that management will rue not accepting Pak's counter-offer on whatever terms they were.