CONICO LTD — Interim / Quarterly Report 2020

Jul 27, 2020

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity	Name of entity
Conico	Ltd
ABN		Quarter ended (“current	quarter”)
49 119	057 457	30 JUNE 2020
Consolidated statement of cash flows		Current quarter	Year to date (12
		$A’000	months)
			$A’000
1.	Cash flows from operating activities
1.1	Receipts from customers	-	-
1.2	Payments for
	(a) exploration & evaluation (if expensed)	(77)	(503)
	(b) development	-	-
	(c) production	-	-
	(d) staff costs	-	(28)
	(e) administration and corporate costs	(45)	(259)
1.3	Dividends received (see note 3)	-	-
1.4	Interest received	-	-
1.5	Interest and other costs of finance paid	-	-
1.6	Income taxes paid	-	-
1.7	Government grants and tax incentives	-	103
1.8	Other (provide details if material)	9	25
1.9	Net cash from / (used in) operating	(113)	(662)
	activities
2.	Cash flows from investing activities
2.1	Payments to acquire:
	(a) entities	-	-
	(b) tenements	-	-
	(c) property, plant and equipment	-	-
	(d) exploration & evaluation (if capitalised)	-	-
	(e) investments	-	-
	(f) other non-current assets	-	-

ASX Listing Rules Appendix 5B (01/12/19) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter	Year to date (12
		$A’000	months)
			$A’000
2.2	Proceeds from the disposal of:
	(a) entities	-	-
	(b) tenements	-	-
	(c) property, plant and equipment	-	-
	(d) investments	-	-
	(e) other non-current assets	-	-
2.3	Cash flows from loans to other entities	-	-
2.4	Dividends received (see note 3)	-	-
2.5	Other (provide details if material)	-	-
2.6	Net cash from / (used in) investing	-	-
	activities
3.	Cash flows from financing activities
3.1	Proceeds from issues of equity securities
	(excluding convertible debt securities)	-	326
3.2	Proceeds from issue of convertible debt	-	-
	securities
3.3	Proceeds from exercise of options	-	-
3.4	Transaction costs related to issues of equity	-	(17)
	securities or convertible debt securities
3.5	Proceeds from borrowings	61	393
3.6	Repayment of borrowings	-	-
3.7	Transaction costs related to loans and	-	-
	borrowings
3.8	Dividends paid	-	-
3.9	Other (provide details if material)	-	-
3.10	Net cash from / (used in) financing	61	702
	activities
4.	Net increase / (decrease) in cash and
	cash equivalents for the period
4.1	Cash and cash equivalents at beginning of	223	131
	period
4.2	Net cash from / (used in) operating	(113)	(662)
	activities (item 1.9 above)
4.3	Net cash from / (used in) investing activities	-	-
	(item 2.6 above)
4.4	Net cash from / (used in) financing activities	61	702
	(item 3.10 above)

ASX Listing Rules Appendix 5B (01/12/19) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter	Year to date (12
		$A’000	months)
			$A’000
4.5	Effect of movement in exchange rates on	-	-
	cash held
4.6	Cash and cash equivalents at end of	171	171
	period
5.	Reconciliation of cash and cash	Current quarter	Previous quarter
	equivalents	$A’000	$A’000
	at the end of the quarter (as shown in the
	consolidated statement of cash flows) to the
	related items in the accounts
5.1	Bank balances	171	223
5.2	Call deposits	-	-
5.3	Bank overdrafts	-	-
5.4	Other (provide details)	-	-
5.5	Cash and cash equivalents at end of	171	223
	quarter (should equal item 4.6 above)
6.	Payments to related parties of the entity	and their	Current quarter
	associates		$A'000
6.1	Aggregate amount of payments to related parties and their		30
	associates included in item 1
6.2	Aggregate amount of payments to related parties and their		-
	associates included in item 2
Note:	if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of,
and an explanation for, such payments.
6.1 - Management Fees, as per agreement, were paid during		the quarter to a company of which Mr GH
Solomon and Mr DH Solomon are directors.

ASX Listing Rules Appendix 5B (01/12/19) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

7.	Financing facilities Total facility Amount drawn at
	Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. amount at quarter end $A’000 quarter end $A’000
7.1	Loan facilities 401 401
7.2	Credit standby arrangements
7.3	Other (please specify)
7.4	Total financing facilities 401 401
7.5	Unused financing facilities available at quarter end 168
7.6	Include in the box below a description of each facility above, including the lender, interest
	rate, maturity date and whether it is secured or unsecured. If any additional financing
	facilities have been entered into or are proposed to be entered into after quarter end,
	include a note providing details of those facilities as well.
Meteore Metals Pty Ltd (a wholly owned subsidiary of Conico Ltd) and Barra Resources Ltd (“Barra”) entered
into	a loan agreement on 28 October 2019 pursuant to which Barra will lend Meteore Metals Pty Ltd up to
$500,000 or further amount as agreed, for a term of 3 years (“Term”) to fund Stage 3 expenditure on the Mt
Thirsty JV Pre Feasibility Study. Interest at 5% per annum calculated daily on amounts drawn down and will be
capitalised into the loan annually in arrears and the loan may be repaid early in cash at Conico’s election.
The	loan must be repaid:
	(a) in full immediately upon the occurrence of a prescribed event of default under the loan agreement;
	(b) if, Meteore Metals Pty Ltd transfers its interest in the Joint Venture, or there is a trade sale by or change
	of control of Conico or Meteore Metals Pty Ltd, in full within 14 days of the relevant event occurring;
	(c) if the final LME Cobalt Price on a day on which the London Metal Exchange is open for trading (Trading
	Day) is greater than or equal to US$60,000 per tonne for 15 consecutive Trading Days at any time
	during the Term, in full within 90 days thereof (unless Conico (or any of its subsidiaries, including
	Meteore Metals Pty Ltd) has been unable, despite use of reasonable endeavours, to raise an amount
	equal to the aggregate of $1,000,000 plus the outstanding amount of the loan and all accrued interest
	(“Minimum Capital Amount”) prior to the expiration of this 90 day period);
	(d) if the aggregate net amount of any and all capital raisings conducted by Conico (and its subsidiaries)
	during the Term is greater than $1,000,000, in full or (if a lesser amount) in part by an amount equal to

• (d) if the aggregate net amount of any and all capital raisings conducted by Conico (and its subsidiaries) during the Term is greater than $1,000,000, in full or (if a lesser amount) in part by an amount equal to 20% of such Conico capital raisings above an aggregate of $1,000,000, within 7 days of receipt of cleared funds;

in full at the end of the Term, if the loan has not already been repaid, provided that if Conico has not raised more than the Minimum Capital Amount and repaying the loan would see Conico’s cash balance fall below $500,000, Meteore Metals Pty Ltd may, at its discretion, cause the loan and accrued interest (or part thereof) to be repaid in Conico shares at a 10 day weighted average price.

8.	Estimated cash available for future operating activities	$A’000
8.1	Net cash from / (used in) operating activities (Item 1.9)	(113)
8.2	Capitalised exploration & evaluation (Item 2.1(d))	-
8.3	Total relevant outgoings (Item 8.1 + Item 8.2)	(113)
8.4	Cash and cash equivalents at quarter end (Item 4.6)	171
8.5	Unused finance facilities available at quarter end (Item 7.5)	-
8.6	Total available funding (Item 8.4 + Item 8.5)	171
8.7	Estimated quarters of funding available (Item 8.6 divided by	1.5
	Item 8.3)
8.8	If Item 8.7 is less than 2 quarters, please provide answers to the following questions:
	1. Does the entity expect that it will continue to have the current level of net operating
	cash flows for the time being and, if not, why not?

ASX Listing Rules Appendix 5B (01/12/19) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

• Answer: Conico does not expect the current level of net operating cash flows will continue. The level of net operating cash flows in the June 2020 quarter was high due to increased expenditure due to completing the Mt Thirsty JV Pre-Feasibility Study (PFS). As announced on 20 February 2020 (ASX Announcement - Mt Thirsty Cobalt Nickel Pre Feasibility Study), the PFS has been completed and direct project expenditure will now revert to a minimum whilst the partnering strategy is being pursued.

• Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?

• Answer: Based on the current cash being used in operations, Conico has sufficient cash for the time being and is not currently proposing to raise further cash to fund its operations.

• Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

• Answer: Yes, Conico believes it will be able to continue its operations and to meet its business objectives as its net operating cash flows have reduced significantly.

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Date: 28 July 2020 Authorised by: Aaron Gates

Company Secretary / CFO

(Name of body or officer authorising release – see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 5B (01/12/19) + See chapter 19 of the ASX Listing Rules for defined terms.

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