16/09/2024
Dear Shareholder of Global Lithium Resources,
STATEMENT TO SHAREHOLDERS
As you know over the last month I have been busy discussing concerns I have with the board. My concerns relate to delivering keystone outcomes for the lithium projects and increasing the efficiency of the board and the company.
To do this most effectively I am seeking your support to be appointed as a director of our company. In my view the efficiency of the board is critical to the success of the company. Before going down the path of requesting that the board hold a meeting I discussed matters with the Chairman.
It is unfortunate that I was not able to convince him of the need that two directors resign immediately, it was for that reason that we issued a Notice requiring a meeting of the Shareholders. I am surprised to now read that the board wishes to go to the Supreme Court to apply to extend the time for the shareholders meeting to be held.
On my calculations the company will need to return to market within 12 months. For that reason changing the board and creating further opportunities to reposition the company is critical. We all know the recent performance of Global Lithium Resources has not been what it should be, it is only after discussions with the board Chairman and issuing the Notice of Meeting that the board was prepared to realise that change is necessary.
I believe Global Lithium Resources can and must do better.
On Friday last week I sent my statement to accompany the call for Shareholders Meeting. I was surprised to find that there was an attempt by the company to address some of my concerns by releasing a statement to the market today.
I am attaching below a video introducing myself and explaining why I called the meeting and why I believe I have the skills needed by Global Lithium Resources.
There are three reasons we must change the direction of the company by changing the directors on the board:
1. the board must be more agile and able to ensure information released to market is fully detailed;
2. the board must drive the delivery of keystone outcomes and move towards production, instead continuing to focus on further exploration; and
3. the board must securing investor confidence for future outcomes.
1. A RETURN TO SHAREHOLDER VALUE
The lithium market has faced its challenges this year with Australian lithium exports now forecast to decrease to $18 and then $16 in 2024-25.
The current Directors of Global Lithium Resources have failed to ensure that the company responds to these difficult economic times. They are complacent and working as if it is business as usual. Recent company announcements have not boosted investor confidence.
Whilst resources companies have generally seen a downturn, this is only a small part of the reason why we have seen a significant shareholder value decrease: our company share price dropped well before the price of lithium carbonate dropped.
Why did our share price drop? And why haven’t recent announcements lifted the share price?
Put simply, the share price dropped sharply after the release of the scoping study and well before the value of lithium carbonate dropped. This shows that the board failed to properly assess the Manna Scoping Study released in early 2023. The insufficient detail affected investor confidence and share price.
3. VALUE OF LITHIUM CARBONATE
The current company structure is inefficient. While other companies have reduced the size of their board and aimed for greater efficiencies, Global Lithium Resources has not. We continue to employ a full-time CFO, rent premium office spaces, and maintain a staff of eight. But despite this, we are not even meeting key milestones.
The company continues to use cash reserves – this will have a further effect on investment in the company by shareholders.
4. COSTS HAVE CONTINUED TO BE HIGH
4.1 WE NEED A DIRECTOR WHO CAN FOCUS ON DELIVERING KEY OUTCOMES AS WE MOVE FROM THE EXPLORATION PHASE TO THE CONSTRUCTION PHASE
The company has not delivered keystone outcomes despite maintaining a workforce of 8 personnel. We need to press forward and deliver the following:
1. A Native Title Agreement;
2. A Definitive Feasibility Study; and
3. A Mining Licence.
The company must shift its focus to developing the existing resources instead of further exploration activities. We must start delivering outcomes.
The shift away from exploration means that the needs of our board must also change.
I have a close relationship with the local Indigenous Groups. A relationship that is built on mutual respect; I will use my connections to develop Native Title Agreements with the Kakarra Part B Native Title claim group.
I know how to move our company into the construction and mining phase. I am experienced and capable. I expect outcomes and I work tirelessly to produce outcomes. I have done it in my own businesses, and I can do it for Global Lithium Resources.
I am qualified for this position. I have a bachelor’s degree in information technology from the University of Shanghai. I have successfully built and maintained a profitable building company in Australia while many builders went bankrupt. I know what it means to be efficient and effective and produce results. I am capable and I have the experience to deliver outcomes for Global Lithium Resources.
I can and I will ensure the success of realising the value of existing deposits.
5. RESTORING INVESTOR CONFIDENCE TO SECURE INVESTMENT FOR THE FUTURE.
I am calling for the removal of independent non-executive directors Greg Lilleyman and Hayley Lawrence and putting my own name forward for the position.
I want to position the company to maintain the confidence of key investors. I am capable of driving the company forward:
1. I will ensure we spend every dollar wisely;
2. I will return investor confidence;
3. I will deliver on the existing projects.
We cannot afford to waste more time and money on things that do not deliver the projects.
Despite the down-turn in the value of Lithium prices, I am confident that if the company shows it is delivering on existing projects, then we will see the return of market confidence and continued shareholder investment.
I have the relationships that are needed. I am the president of the Australian Zhejiang Federation of Overseas Chinese Entrepreneurs group and an Honorary Chairman of the United Chinese Associations of Australia Incorporated.
I have relationships with local and foreign investors and will use these contacts to grow the company.
I am able to restore investor confidence and realize the potential of our Manna Lithium Project in the Goldfields and the Marble Bar Lithium Project in the Pilbara region.
6. CONCLUSION
As an experienced director I know what it takes to turn Global Lithium Resources around and I ask for your vote.
I have the relationships with investors, I know and understand Global Lithium Resources projects and I will return confidence to investors of Global Lithium Resources.
As the director who has deep relationships with investors, Indigenous Groups, and industry networks, I will not only drive projects with a careful eye for detail but I will deliver on making our investment a success.
I ask for your support to become a director of Global Lithium resources to drive the company forward.
Now is the time to act. We have an opportunity to steer Global Lithium Resources to success. I have the skills, experience and ability to turn Global Lithium around to see a return on all of our investment.
Yours sincerely,
Leon Zhu
CEO
Leon Zhu asks for your support as a shareholder of Global Lithium Resources to become a director. The company needs Directors who will drive the company for...
