The webinar is being recorded, and a replay will be available on the company's website shortly. Thank you for joining us, and over to you, Colin. Thanks, Fiona. Good morning, everybody. My name is Colin Moorhead. I'm the Executive Chairman and Managing Director of Xanadu Mines Ltd. I'd like to welcome you to the webinar, which we've called to discuss and answer questions with regards to our recent bid announcement with Singapore-based Bastion Mining. Just the standard disclaimers. Next one, please, Spencer. In terms of the transaction, I'll refer you to the announcement dated 9 April, which described a corporate transaction with the company called Bastion Mining, which is held by a consortium led by Boroo. This is an off-market takeover process at AUD 0.08 per share and subject to a minimum acceptance to achieve 50.1% of the shares and control of Xanadu. The Xanadu Takeover Bid Committee considers this an attractive premium over our share price and has unanimously recommended shareholders accept the offer in the absence of a superior proposal and subject to a fair and reasonable opinion by the independent expert. As per part of this deal, Bastion will undertake a share subscription under Xanadu's Listing Rule 7.1, capacity of 15% at AUD 0.06 per share to raise AUD 17.2 million, which will fund the company through the bid period. There is a seven-day hold period on that placement, completing on Monday, the 26th of May, and Xanadu has committed to withdraw the put option resolution after that date, which means the 4th of June extraordinary general meeting will likely either be held with no resolutions or withdrawn completely. We expect to publish the bidders and target statements and open the bid period early next week, at which point shareholders will be able to accept into the bid should they choose so. In terms of the transaction rationale, we see this as a very good bid for stakeholders, including Mongolia, our shareholders, and our employees. It's an attractive premium of over 50% and delivers cash value efficiently and directly to our shareholders. It resolves the question of future funding of the Kharmagtai Project and risks of dilution. Finally, having considered the proposed offer carefully, the Takeover Bid Committee recommends that shareholders accept the Bastion offer in the absence of a serious superior proposal and subject to the independent expert concluding in his report that the offer is fair and reasonable to Xanadu shareholders. So who is Bastion Mining? It's a consortium consisting of Boroo Proprietary Limited and Xanadu Director Ganbayar Ikhagvasuren, who is not a director and has a non-controlling interest to Bastion. Boroo is a private Singaporean company that is emerging as a mid-tier copper and gold metals producer, investing in major gold and copper projects internationally. They own the Lagunas Norte gold mine in Peru, the Boroo Gold Mine in Mongolia, and have a controlling stake in Steppe Gold, which has the ATO mine and the Uudam Khundii project in Mongolia. With its strong Mongolian expertise, we see Boroo as a natural partner for the Kharmagtai Project and for the JV with the Zijin Mining Group. I won't go through all the detail on the transaction, but this slide has been included, so you can have a look at it. It will be available online for your review. In terms of the put option, we've communicated all along that Xanadu was working hard to provide multiple viable options to take the project forward, including Plan A, a corporate transaction; Plan B, to exercise the put option; or a self-funding Plan C, in that order of preference. With the announcement of the Bastion offer, we are moving towards Plan A and subject to completion of their AUD 17.2 million share subscription agreement. We will be withdrawing the put option resolution from our 4th of June AGM. In terms of the timetable, following our announcement on Monday, the 19th, there's a seven-day hold period on Bastion's share subscription, which will result in Bastion holding 13% of Xanadu. After this holding period, early next week, we will issue those shares and dispatch the bidder and target statements and open the bidding period. From that point, Xanadu shareholders will be able to accept into the bid should they choose, with an indicative closing date of the 2nd of July 2025. This is a relatively fast timetable to completion, and we expect, in the absence of a superior offer, subject to the independent expert concluding that the offer is fair and reasonable and satisfaction of the bid conditions, that this bid will be successful. With that, that's a fairly neat summary of the situation. I'd like to open it up for questions and answers, and we'll throw to Anna to curate that, please. Okay. Thank you for that, Colin. We've just got to cover a few questions starting to come through now. So the independent report indicated a fair value of AUD 0.18 a share for a takeover. Why is the board so keen for an AUD 0.08 valuation? I don't think the independent expert's report did value it at AUD 0.18 a share. It had a range, and this offer at effectively AUD 160 million is sitting near the top of that range. I think there's research out there that indicates AUD 0.18, but that's independent research that we have no control over. Okay. Thanks for that. Zijin and other parties. Why Boroo's offer was judged as superior to the put option? Sorry, Anna, can you repeat that? I missed the first part of it. Sure. Can you give us a bit of insight into the differences in Xanadu's discussions with Zijin and other parties, and why Boroo's offer was judged as superior to the put option? I think that should be Bastion. Bastion, yes. I think taking the first part, second, the Bastion offer is cash today. It delivers a liquidity event for shareholders. It avoids future dilution risk in funding with the funding options. It represents a 57% premium to Xanadu's last close and a 62% to Xanadu's 10-day VWAP. It's a healthy premium. It's got a limited number of conditions associated with it. Importantly, Bastion recognizes and accepts the risk of any political risk in Mongolia, and there are no MACs or warranties associated with that. It's a good solid offer. The put, it's a bird in the bush versus two-in-the-hand type discussion. The put, we're giving control of the project and 25% of Khuiten Metals to Zijin for $25 million, call it AUD 40 million. And then a loan carried through into the future. That's the option that the independent expert valued and opined on in the previous independent expert's report. That sort of locks people's money up for a fair period of time. There was quite a bit of investor feedback that investors were split on how popular that would be. AUD 0.08 today versus maybe a higher value later on. We're interested to see where the independent expert will land with respect to this specific offer. Okay. Thank you for that. Why have Bastion been invited to subscribe for shares at a share price of AUD 0.06 rather than the bid price of AUD 0.08? Thank you. The entire purpose of the placement is to provide funding into the company to keep us liquid through the bid period, which could extend for months or longer. That money needs to cover the transaction costs. It needs to cover working capital requirements, including our exploration projects outside of Kharmagtai, and it needs to fund cash calls into the project, which is managed by Zijin. We need money in the company to run the company through the bid period. There are two ways to do that. One is through equity and the other is through debt. Debt structures add complexity to the deal, and I think this is a much simpler and cleaner way to do it. Why AUD 0.06, not AUD 0.08? AUD 0.06 is still a 20% premium to where the market was. It affords Bastion some sort of deal protection should a superior bid come in. Actually, in that regard, what has Zijin's response so far to the bid been, and are there any insights into discussions with Zijin prior to this bid coming through? I haven't heard anything from Zijin since this bid became public. I can't really comment on discussions with Zijin prior. We certainly were in a period of exclusivity with them after receiving an NBIO from them. Zijin were unable to follow through on that NBIO at this time. There is no other bid at this point in time. We have the Bastion bid, and we're recommending that as being subject to what I've said before as being a good bid. Okay. Thank you for that. What will happen if less than 50% of the shares are tendered into this bid offer? Good question. You probably end up in a sole gold type situation, don't you? You've got two big shareholders on your register who will need to progress the project. At a JV level, nothing changes, really. It's a 50/50 JV between Xanadu and Zijin. There's probably $30 million-$50 million needs to be spent to take this project to FID, and those JV partners will have to fund that. We would have $17 million in the bank, and we would have to follow up our options with backers who have got us a number of structured debt type facilities ready to go, basically, to fund our component of that forward. Obviously, a corporate-level deal would still be possible in the future. Does the equity offering to Bastion require shareholder approval? No. It's within the 7.1 placement capacity. Okay. Great. Thanks for that. When does Xanadu need to start funding its share of the BFS? We are still in that period where Zijin are preparing the BFS budget scope and schedule, and we're yet to approve that. We've been trickling working capital into the company to keep it wheat and to keep everybody employed and actively engaged. We're yet to put the foot down on the accelerator and start moving the project forward. Obviously, there's inferred material that needs to be raised to indicate that there's more met test work that needs to happen. There's work to do on water, and obviously, there's work to do on an investment agreement, permitting, and approval. There's a fair bit to do still. Our view is that it should take about 18 months, but we're not the operator, so we're still waiting on Zijin there. Right. Another question. Based on the current timeline with Bastion, is there still time for another superior offer to be presented? What sort of timeframe would that be that they would have to theoretically get in? I mean. There is, of course, and that's why there's a hold period. There's an opportunity for Zijin or another party to come in. There's an AUD 0.08 valuation on the table. The whole copper world's aware of this project and watching it. The market will decide what the value is now. I think Bastion's put their best foot forward for now. Obviously, once the bid period opens, a competing proposal gets harder. It is probably a sooner rather than a later opportunity for third parties to bid here. Great. You said that the Bastion offer was likely to be accepted in the absence of a superior offer and subject to independent expert report recommending it as being fair and reasonable. Would the board still recommend the Bastion bid if the independent expert deemed the bid is unfair but reasonable, as often happens in other situations like this? Yeah, that's a good question. I'd have to go back to the board to discuss that. I can't sort of preempt. In the absence of a better deal, I suspect we would probably still recommend it. Again, that depends on what the independent expert says and the detail of that valuation. Can you discuss what level of shareholder support you have already achieved on the 50% target, including the major independent shareholder, board, and management, and Bastion and associates? Thank you. Yeah. So with this placement, Bastion will have effectively 13% at the start. Our second biggest shareholder has signed a letter of intent to accept the bid in the absence of a superior offer, which is another 12%. Board and management would probably take that up another 2%-5%. You are close to 30% with those people. The feedback has been anything but negative. It has all been positive so far. Listen, I would suspect we will get to 51% quite quickly. We have not cancelled the EGM and the put option resolution yet, and we will not until that placement completes next week. Great. What will happen if a shareholder chooses not to tender their shares in? They'll remain shareholders of Xanadu. I don't know what Zijin will do, but if they don't, they hold 18%. You will end up being a shareholder in a company that's majority controlled by Bastion, I suspect. You'd have to take individual advice whether that's a good thing or not. Yeah, I mean, there's nothing compelling a shareholder to accept this bid. You can certainly continue to hold Xanadu shares. Unless, of course, the bid gets to 90%, which would require Zijin's support, and then it would become a compulsory takeover situation. Great. Thank you for that. Was there anything missing from the offer that you would have liked to see? There's always things. But listen, to be fair, it was a pretty pragmatic negotiation. We were able to get rid of sort of a debt component and replace it with a placement, which is much simpler. We were able to negotiate the bid becoming unconditional at 50.1%. We were able to negotiate really or mitigate the risk of any material adverse control conditions arising from politics in Mongolia or whatever. I think it's a pretty complete, well-rounded bid. There's no, what do they call, social issues in there. There's no board positions or anything like that. We've just kept it fairly straight back on this, and I'm pretty happy with what it is. It does also address where we go with our non-Kharmagtai type projects, Red Mountain and Sant Tolgoi. They become part of this. I see a lot of merit in this bid. Basically, it's a Mongolian face to a Mongolian project. I think they have huge capability to operate safely and effectively in Mongolia. That includes those exploration projects as well as Kharmagtai types. It builds on Bastion or Boroo's strategy to build a mining business globally and in Mongolia. I think it's good for stakeholders, and I think it's a pretty well-structured bid. Great. Another question regarding this time around for the takeover board committee. Why has Shaoy ang Shen been excluded from the Takeover Board Committee? It's conflicted. He's part of a competing bid. As is Ganbayar. Ganbayar's not on the takeover committee either because he's also conflicted. The takeover bid committee is comprised of myself and independent directors, Mackey, Muscillo, and Tony Pearson. Obviously, well advised by our legal. Jeffrey's our defense adviser. Shaoy ang Shen, since the start of our JV and our association with Zijin, we've always had an independent board committee that deals with matters where Zijin would be conflicted and where Shaoy ang personally is conflicted. We've always had that. With this bid, as soon as it became apparent that Ganbayar was associated with Bastion, he stepped away from that committee to form this new takeover bid committee. Okay. Okay. Great. Other than Ganbayar, does Bastion require any members of the Xanadu team to remain in place as part of the offer? There's no requirement of that. I wouldn't be surprised if there was a request for some support, but we haven't had that conversation yet. These projects are like your children. They grow up and they move away, but they're still yours. I wish only the best for the project. Should the Bastion bid be successful, we'll personally offer as much support or as little as they want. Great. Talking about Bastion, would Bastion ownership of HMAC type reduce political risk for development meaningfully in your view? Yeah, I think it would. I think that by their very nature, the Mongolians are very nationalistic. At a government level, I think it's a jurisdiction that is improving over time. They recognize the problems of the past and are looking to improve the foreign direct investment settings, particularly in the mining industry at a high level. Politically, the people of Mongolia are very nationalistic and see the resources of the country as being theirs, which is fair enough. Having a heavy Mongolian involvement is actually a plus, and it's something I think the joint venture should take advantage of. Okay. Great. Will Bastion go after Zijin's interest in Xanadu and HMAC type to mop this all up? I don't know. You'd have to ask Bastion that. I think that that's a matter for Bastion and Zijin. I can see no matter what happens here, this copper's going to China, right? You have ownership considerations and offtake considerations, and I'm sure it'll all wash out in the long run. I think that this move in that it clarifies ownership and it clarifies funding forward is good for Mongolia in that I think this mine is more likely to get built this decade than it otherwise would have been. Okay. Great. Okay. If the offer was to fail, how will Xanadu fund this BFS and project construction? Okay. So there's two parts to that. The first part I've kind of already answered in that we'll have AUD 17.2 million in the bank, and we have structured debt options that Bacchus Capital have helped us with to fund the gap. As I said, it's a $30 million-$50 million U.S. journey over 18 months or so to get to FID and Xanadu slash Bastion will be up for half of it, right? The funding of the project itself is the next stage. Current capital estimate expensory is 890 or 900? Yeah. That's right. 890. I would think that that capital, some people think that capital estimate's low, and if you were doing it in WA, it probably is. I do know that Zijin built a Qulong mine at altitude in Tibet for a similar number. This has got to be cheaper than that. I would think once you bring the Chinese overlay to this thing, the capital should come down. Either which way, it's going to be a lot of money. Let's say we're looking for 40% of a billion dollars, $400 million, you would have to look at the project financing options at that point. I think it would take a traditional route from there. If you're there and you're ready to build the thing and you've got all the approvals and all of the studies and the water and the power sorted out and all of that stuff, then the company's worth more than it is today. We'll cross that bridge when we come to it, but I'm sure it's doable should we get there. Okay. Great. Who's been selected for the independent expert report? Will this differ to the parties that were used for the put option report? No, it's the same. It's the same. It would be silly to start again with a completely new independent expert. They were specifically commissioned to write an opinion on the 25% put to support the resolution on that. Obviously, there's a lot of synergy between that report and what we've asked them to do now, which is to make an opinion on an AUD 0.08 all cash offer. We're expecting that to be a one-week exercise rather than a three-month exercise. We're expecting that to be completed in time for us to put out our target statement next week. Just another question we've got. Have third parties expressed interest prior to or after the Bastion bid? Some color on that would be appreciated, please. Okay. After, no. I mean, we've got the usual no shop, no talk type provisions in the BIA. We're not having any conversations with anybody, and there's no one in the data room at the moment. I think Spencer's locked all that down as per the requirement. Prior, there's been a lot of interest in this project. We've had a lot of strategic type investors and mining companies and all the usual suspects, traders, and what have you looking at the project. As I say, the copper world's aware of it. I can't say who they were because they're all in there under confidentiality agreements. This project is well known. I think I've given some color on that before in that most of the serious interest has been Eastern rather than Western. I think the big Western companies were going to Mongolia for a bigger project. As we have seen Rio going to Oyu Tolgoi. I say, tongue in cheek to everyone, the way to find a big copper project is to buy a small one and work on it. This is not a small project. This is already a project that will do 75,000 tons of copper per annum and 165,000 oz of gold, right? If you put that in gold equivalent terms, it is a 500,000 oz per annum gold mine, right? It is not a small mine. It has real potential to grow into something pretty special. As a geologist, I always think that. I wish the project every success in that regard. Okay. Now, another question. Does Bastion ownership provide any protection against the government's strategy of looking to take strategic stakes relative to an external bidder? Someone not from Mongolia? I think legally, no. Practically, yes. I think, as I said, the politics of Mongolia are very nationalistic. If, for instance, an Australian company or a Chinese company or an American company came in and wanted to build a big mine, it is all possible and doable. We have just seen the French do a deal to build the world's sixth largest uranium mine in Mongolia. If you put a Mongolian ownership and a Mongolian face to it, I think practically it is easier. I think, as I said before, that is a natural advantage of Bastion in this process. In fact, if I was Zijin, I would be thinking, "Well, this is actually going to make things easier, not harder. Okay. Great. Who exactly is the independent advising on the offer? And can you provide further details of their background, engineer, geologist, financial person, whatever the case may be? Listen, the independent expert is BDO. I think they're. They used ERM for the technical work. ERM for the technical work. I think, owns CSA Global. That's right. Yeah, it's Australian technical advisors advising BDO, which is a big multinational organization that does these things. Okay. Great. We are starting to—if you would like to ask any more questions, can you please put them in the question and answer box? We've only got a couple more left. Where is it? Why wasn't the board able to properly enact competitive tension for Xanadu like it had aimed for? Why has this taken so long to land here? Have there been issues regarding cultural sensitivity, transaction negotiations, execution anxiety, or something else? Listen, this is the way I'll characterise it. This is coming up to six years of my involvement. It It went pretty quick. The first two years were COVID. Since then, we've done sufficient drilling to put out a very high-quality resource estimate. We've done a scoping study off the back of that estimate, specifically designed to attract a funding partner. Prior to that, we were a little company with a very big asset. You have your tiger by the tail, and it's quite a difficult position to dig yourself out of. That funding partner was Zijin. They came in and put $35 million in to fund a proof feasibility study. Xanadu managed that proof feasibility study immediately post-COVID and published a piece of work that I'm particularly proud of. I'll give Spencer and the guys due credit for putting a very professional piece of work together there. Delivery of that proof feasibility study triggered two things. One, the clock ticking on the six-month put option exercise period. Two, it handed operatorship of the joint venture to Zijin. All of those things got us to where we are today. It might seem like a long time, but it was actually quite a quick time for this when you think about it. Competitive tension is obviously always a nice thing to have. I think there were some barriers to that, not least of which would be people's perceptions, particularly Western perceptions about political risk in Mongolia. Interestingly, the day that our federal environment minister killed a gold mine in Australia, I was hosting the Mongolian Mines Minister at site who was on a mission to understand what the Mongolian government could do to support the mining industry in the South Gobi region, right? There is political risk, and there are perceptions of political risk. It is absolutely, particularly with the history around Oyu Tolgoi, understandable, right? You have that headwind. You have the size and complexity of the project, which is not for everyone. A difficult jurisdiction, a complex project, and a dominant or a big brother for a JV partner. There are only so many strategic investors who are going to take that on. I will say this strategic or this process was not uncompetitive. Certainly until last week, no one had heard of Bastion and their interest. The ball's very much in Zijin's court here. Bastion have made a good solid offer, and I believe that they are in the best position to take this project forward. Zijin can do what they want to do. I'm not sure there's much more we could have done here given the circumstances to generate more competition. In fact, I'm very proud of developing an effective strategy and executing it well. Touch wood, we've achieved all those things. Okay. Great. Regarding Zijin in this, in terms of how they were dealing with you in the exclusivity period, were they reviewing documentation, asking questions, interviewing key personnel, etc.? And secondly, how many people did Zijin allocate towards this process? I might let Spencer answer that in detail, but this is a company that's been involved in the project for three years, and the current operator of the project have 50/50 ownership of the Singaporean holding company and the two Mongolian holding companies. You would think they wouldn't need to do a lot of DD. That's not what happened, actually. There was a lot of DD. Yeah. Look, that's right. They appointed financial and technical and legal advisors in three different countries and ran us ragged through that process. So they took it very seriously. I don't think Zijin, they're a big machine, and they'll have boxes to tick, and they certainly didn't take any shortcuts on their DD. Got a little bit of a cheeky one here. Do you think Rio, being just down the road, would be interested in putting a bid? I'll be more than happy to talk to Rio, but no. Listen, in the past, I felt that that might be a possibility given that it's a pretty good way to grow the copper business in Mongolia and would be in line with their strategic goals corporately. I think also that our concentrate's pretty good quality and clean and could have been a marketing angle there. In reality, I think Rio's well aware of this project. Whenever I've ` to people at Mongolian Australian Business Council type meetings, they're all very complimentary of it. I'm sure they're aware of it. I suspect they've also got enough to chew on in Mongolia at this point in time. Now that we're talking about third parties, beyond the obvious ones, Zijin and Bastion, how can a third party realistically make an offer now with no shop, no talk in effect? Yeah. I mean, I can't elicit an offer or give due diligence or anything like that right now. I think there's been a lot of parties that know this thing pretty well through the data room, etc. They would just have to lob in a higher-value bid for the takeover bid committee to assess as being superior or not. It's not just value you've got to look at. You've got to look at the conditionality of these bids, etc., as well. Yeah, difficult, but there's people with enough knowledge to do it if they see the value. Okay. Great. Going on about alternative bids, if there was to be another alternative bid, would there be a further independent expert report required beyond the one that's currently being done? Probably. I'm not an expert in that area, but if you change the number, the independent expert would have to reconsider, or the number and the conditions. The independent expert would have to look at it. Obviously, you wouldn't go to another expert and say it again. You'd use the person you've got, and you would get them to help the board make that format view. Okay. Just this is another question on the exclusivity period with Zijin. Did Zijin formally request for the exclusivity period to be extended, or did you feel that they needed more time to complete any outstanding tasks? No. The exclusivity period had a defined endpoint, and we just got there before Zijin were able to settle on a binding offer. Gold bought Boroo Gold in August 2024. What does Boroo have left as projects after the transaction? Any thoughts on how much cash they have to give an idea on their financial power or lack thereof? Thank you. Boroo, I think, vented Boroo Gold Mine into Steppe for 56% of Steppe. Boroo actually controlled Steppe at a board level, which gives them the ATO Mine and the other project and the Boroo Gold Mine. They have actually got two operating mines and a number of projects in Mongolia through that. Boroo have the Lagunas Norte mine in Peru, which they bought from Barrick, which is producing good gold right now at record prices. They have got a cash flow positive mine that is generating strong cash flows down there in Peru. My understanding is that they have significant financial resources behind them in Singapore. Certainly, to make a bid of AUD 160 million, you have to have AUD 160 million there ready to go. That has all been ticked off. They have the funds ready to execute this deal. They obviously have the funds to do the placement next week. I suspect, but do not know, you would have to ask Bastion how deep their pockets really are. Okay. Great. That comes to the end of the Q&A session. Thank you, everyone, for joining. A recording of the webinar will be put onto our website either this afternoon or early tomorrow morning. I'll hand it back over to you, Colin, for closing remarks, please. Thank you. Okay. Thank you very much, Anna, and thanks everyone for your time. Obviously, it's been a journey here. We've managed a project of scale and complexity. We've managed a complex, mysterious jurisdiction in a joint venture with the Chinese. It has all come together here. I thank everyone for their patience. I thank my team and everyone for their efforts. We're only a small team, so it's all been hands to the pumps at the moment. I am more than happy to talk to people. We've got our AGM tomorrow. Anybody who wants to come along to that, I'll be more than happy to chat to as well. Thank you for your interest and your time. Thanks again to Fiona at White Noise and to you, Anna. Of course. Thank you. Of course. Thank you.