TNG Updates

TNG Change of Management | Update 17

Response to Notice of Meeting

Yesterday TNG Limited (TNG) published a Notice of Meeting (NOM). It confirms that Shareholders on the registry at the record date of 18 September will be able to vote on the Resolutions that I have proposed to Change Management at TNG at a General Meeting on 20 September.

While I am disappointed that the General Meeting has been delayed, I expect voting to open soon, in line with customary practice. On Thursday I will provide an Update for all those seeking to vote early, including how to do so. The Change team will also rollout upgrades to its website, where those seeking to support the campaign can do so in various ways, and within prevailing legal regimes.

For today, I address various issues raised in the NOM, both expressed and inferred.

The Change campaign is grassroots shareholder activism

To start, I note that the NOM has reused the phrase from the company ASX announcement of 3 September where the strength and depth of the Change campaign is dismissed in derisory terms:

The section 249D request was received from five of the Company’s more than 5,800 shareholders (NOM pg2).

For reference, the TNG registry provided by the company a month ago has ~800 shareholders with holdings of least 250,000 shares (~$25,000). In the three weeks since I launched the Change campaign I have been in direct touch with at least half of these holdings, via Roadshow events, email and phone calls. I have been overwhelmed by the level of support for the action. And I still have other steps to rollout, should management not receive the loud and clear message that is being delivered by everyday Australians.

While this is fundamentally a grassroots campaign, I have also prioritised establishing open and constructive dialogues with the institutional shareholders of TNG, principally located in Germany, Singapore and China to exchange views. The principals involved are highly astute and experienced investors, and have demonstrated their commitment to TNG on a long term basis. They have also provided helpful comments about their views on the remuneration structure at TNG and what changes may be required, so as to better align with shareholder interests (see further below).

As I highlighted in Update 12, I do not claim their support, as to do so might inadvertently bring the collective action regime into view. Certainly though, I am pleased that these groups are on the registry, and I am looking forward to deepening these relationships over time.

The Change campaign is not a takeover

Next, the NOM makes repeated allusions to our Campaign constituting a de factotakeover, especially at page 11, and here:

We believe that the Requisitioning Members’ action is an attempted acquisition of control of the

Company without any premium or payment to you (NOM pg2).

This is misleading.

A s249D action is fundamentally different from a takeover.

Section 249D of the Corporations Act contains a very important shareholder right – the right for shareholders to request the directors of the company to call and arrange to hold a general meeting of members to vote on certain proposed resolutions. This statutory right has been exercised by the requisitioning members.

In contrast to a takeover, the Change campaign that I am leading will result in everyday Australians, along with international shareholders, continuing to own their stakes in TNG. This is the best outcome for all shareholders, given the very low valuation that financial markets ascribe to the Mount Peake project being viable.

The relevant concept here is not ‘premium or payment’ for control. Instead, the Campaign I am leading is in the process of removing the ‘management discount’ that has weighed on the share price over a sustained period of time – see Update 12 for this framework.

A sustainably higher share price for TNG is good news for everyone. It is a direct consequence of financial markets incrementally pricing the removal of current management.

The appointment of London-based NED confirms a crisis of governance at TNG

Next, the NOM has sought to address the third of fiveconcerns raised in our Members’ Statement around governance, by appointing Ms Elizabeth Henson, based in London, as a Non-Executive Director (NED) during the 249D action. The NOM goes further, seeking to burnish her credentials, and then departing from any common-sense interpretation of the appointment, as follows:

The Requisitioning Members have proposed a resolution to indiscriminately remove newly appointed directors in circumstances where they have publicly criticised the existing Board for not appointing new directors(NOM pg5).

To start, Resolution 5, which removes any Director appointed after 18 July 2022, is not indiscriminate. It is standard practice. It was crafted to ensure that management did not stack the Board in response to the 249D action.

I understand that other Requisitioning Members have, over eighteen months prior, introduced qualified NEDs to management, as a means of broadening the depth and independence of the Board. Management repeatedly resisted these processes, further embedding its insularity, and creating the micro-board dynamics that should be removed, and which are so detrimental to the interests of shareholders.

On the substance, I repeat my comments from Update 7:

The appointment of a London-based NED during a 249D action does not address the concerns held on governance at TNG. It illustrates the point. The Board that I will build out will prioritise independence, experience, profile, complementarity and, importantly, will be based here in Australia.

I add today that I am still surprised that Ms Henson accepted the appointment. The episode confirms that TNG’s governance is not merely in a downward trend, it is in crisis.

Mr Henson’s role on the Board is fundamentally tainted. Her role is not compatible with the new era at TNG.

The Change team has a roadmap, management does not

On the substantive topic of progressing Mount Peake to production, management says:

Your Directors have already achieved much and have strong plans for taking the Company forward and for taking Mount Peake through to production. The Company’s progress to date is well publicised in the Company’s ASX announcements and quarterly reports (NOM pg2).

This is neither realistic nor accurate.

In its ASX announcement of February 14, the company provided a roadmap for the year ahead, with various deliverables specified by quarter for 2022. Management missed their Q2 deliverables, including the provision of an updated capital cost estimated for the integrated Mount PeakeProject. The company has provided no guidance on this deliverable since, in contrast to many other junior and mid-tier mining companies.

In any event, the Change team does have a roadmap, provided in Update 3, with the following caveat:

I need to emphasise that this Roadmap is indicative only. While it is typical for major shareholders to have greater access to the Board, I am still operating only from publicly available information. It is fair to assume that I have done much more due diligence than the typical retail investor, but there is still much I do not know, particularly in terms of guidance around CAPEX for Mount Peake. This remains the responsibility of current management.

Note, as well, that if our roadmap, which calls for staged phases of Review, Implementation and Execution over 18 months, was viewed as too conservative by management, they would have already confirmed that they are on track for FID by the end of this year.

The reality is that management is delaying once again. It appears there is no credible path to project delivery, particularly given the company's low standing in global capital markets, which renders impractical the financing requirement for project equity at Mount Peake.

In contrast, I am focused on my proposed future role asresponsible steward for the transition management phase of TNG, and concurrently, on building sustainable and realistic path to deliver Mount Peake.

And I can assure shareholders, small and large, that as I work through the project review stage of our roadmap, I will maintain the highest standards of investor communications, that contrasts sharply to the embedded practices over the past decade.

I will additionally establish best practice in all areas of governance.

And I will bring leadership to TNG, characterised by hard work, integrity and determination.

The Change team has the relevant experience and standing to lead TNG

Management state that the Change team is not qualified, as follows:

In the opinion of your Directors, based on the information the Requisitioning Members have disclosed in the Requisitioning Members’ Statement, the skills and experience of the Requisitioning Members’ nominee directors do not qualify them to manage (and control) an ASX-listed company or to develop a complex project like Mount Peake (NOM pg6).

This is inaccurate, and misleading.

I bring elite domain expertise in global finance, and an extensive professional network across all levels of government in Australia, including the Northern Territory. I have worked as a fiduciary both in government and the private sector, entrusted with responsibilities that far outweigh the proposed future role at TNG.

I additionally have domain expertise in technology, media, law and political science, all of which are highly relevant to delivering a project as multi-faceted as Mount Peake. My professional network extends across the Asia Pacific, the Mid East, Europe and the Americas at the highest levels, and includes C-suite connectivity at the largest mining companies in the world and in Australia.

Dr Anthony Robinson brings deep and valuable experience in project engineering, including value engineering, which is a critical skill-set in building a sustainable path for Mount Peake. His domain expertise also extends to accounting, as a former partner at Deloitte.

The Change team will adopt Corporate Governance Principles and Recommendations

The NOM includes various other criticisms of the Change team on page 11, as follows:

We consider that it is not appropriate for shareholders representing such a small percentage of TNG’s capital to assume control of the Company, leaving the Company with Simon Morten as the only independent director (if the Resolutions are all passed). This would be contrary to the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (Corporate Governance Principles), which recommend a majority of independent directors.

We further note that in the Requisitioning Members’ Statement, it is stated that Mr Wilson is proposed as interim Chairman, with an executive remit in his ‘areas of expertise’. Given the executive remit, such an appointment would require negotiation with the Company of an executive contract and salary in addition to director’s fees. The role of Executive Chairman is inconsistent with the best practice Corporate Governance Principles which recommend an independent Chair with a separation of Board and executive duties.

Briefly, I own approximately four times as many shares as Mr Burton and Mr Elkington, so the first point is the wrong way around. Management does not seem to understand the essence of shareholder activism, where the owners of the company step up and take charge.

Regarding the independence of Dr Robinson, I agree with this point. However, in the circumstances there was no other practical way for the Change team to oust Board members who have entrenched each other, to the detriment of shareholders. The commitment I have made in the roadmap to introduce additional NEDs will bring the Board into line with the Recommendation cited. I note in the meantime that I did not know Dr Robinson before July 16, and met him in person for the first time on August 5, being last Friday in Perth.

As to my executive remit, this is both necessary and optimal for TNG, as we move through the transition management phase, and into the roadmap. I confirm, as I did during the roadshow events, that my salary will be modest and comprise two components, being for the role of Chair, and the various executive roles that are required. I have additionally discussedthis topic extensively with major shareholders, including those based in Singapore and Germany, in light of the current company remuneration schemes.

The area of long-term incentives (LTI) has also been extensively discussed and views exchanged with these parties.The major shareholders indicated that a scheme of Performance and NED Rights requires immediate and wholesale reform, so as to align both management, including myself, along with key employees, with the interests of shareholders. It will be an early priority of mine to work through the details.

I am a committed, long-term investor in TNG

On page 6 of the NOM management included the followingstatement:

Your Directors are aware that … Mr Wilson has been actively selling Shares in the

Company since May 2022, including since Mr Wilson gave section 203D and 249D notices to the Company. The Directors question why Mr Wilson is making statements about investing for the long term while actively disposing of TNG Shares.

It is difficult to interpret this as other than an attack on my personal integrity, as it has no bearing on the best interests of the company, and it is information that is already in the public domain, via monthly Top 20 statements, and the Substantial holder notice I lodged as part of this action.

For abundant clarity, I confirm I sold approximately 1.5mn shares commencing May, in small amounts, so as not to damage already fragile market conditions in TNG’s stock. The proceeds were around $90,000, and the sales represented approximately 5% of my holdings, realised at an aggregate loss to entry.

While tax management was a consideration, the principal purpose was philanthropic. Specially, the funds are for the Kambri Scholarship which supports Indigenous students to study at Australian National University and go on to fulfilling careers and lives. More details of this important initiative can be found online.

I further confirm that in Q1 this year I signed a Trust Deed with the ANU concerning my long standing and ongoing support of this Scholarship. I have attached redacted version of this below, with the ANU’s permission.

Regarding my long-term commitment to TNG, I am not only one of the largest shareholders, I am now fronting a public campaign to lead the company in the future. I am doing so because I know with certainty that change is required, and also because I am the best person to manage this change. I committed significant financial capital to my investment in TNG, and now I am exerting my reputational capital as well.

I highlight as well that I am personally incurring all of the expenses of Change campaign, and that I will not be seeking reimbursement from TNG when control passes over. This includes legal, IT and events, currently around $125,000.

To illustrate how seriously I take the fiduciary role, together with good governance, I note that Requisitioning Members have kindly offered to pay for recent roadshow events in Melbourne and Brisbane. I declined as a matter of principle, and with good grace of course.

A final point here. The people who attended recent roadshow events will have witnessed first-hand my long-term commitment to TNG. They will have heard my origin story in the Northern Territory, and my determination to see this through.

They will also view this attack on my personal integrity, that was orchestrated online over the past week with information only available to management, with the contempt that it deserves.

Support letters are welcome

While it is not conventional, the various letters of support for TNG included in the NOM are welcome. At this juncture it is not appropriate for me to be in touch with stakeholders, given the current state of play and regulatory environment.

An exception is SMS, where I confirm an open and constructive dialogue, in their capacity as a shareholder, to exchange views between investors.

The Change team is ready to lead, and will restore dignity and respect to TNG

A few points to close.

First, I have sent a letter to Mr Burton and Mr Elkington today, in my capacity as a member, reminding them of statutory obligations regarding data retention. This is included as an attachment below.

Second, I confirm that Dr Robinson and I are operationally ready to lead TNG and deal with various change of control scenarios, including the abrupt resignation of Mr Burton and Mr Elkington. Shareholders and stakeholders are in good hands.

Third, I am not yet calling for Mr Burton and Mr Elkington resignation, though I expect others will. I do not view a delayed vote as being in the best interests of TNG. But there is a process to follow.

As such, I will proceed with the steps I advised yesterday, in Update 16.

Namely, I will host an AMA session for 1-2 hours from 5pm AEST, and on Thursday I will roll out the voting phase of the campaign and website. This will include a channel where you can register your support for the Change campaign.

Signing off, from Alice

Finally, I am in Alice Springs tonight, my spiritual home.

I will allow myself some down time to project forward some years, when Mount Peake is up and running, knowing the transformative impact it will have for shareholders, stakeholders and the Territory.

But then it will be back to work. There is much to do, for TNG to become the powerhouse we all want it to be.

Please join me on the journey, as Change comes to TNG.



Proposed Chair of TNG Limited

Link to Appendix 1

Link to Appendix 2