CORE ENERGY MINERALS LTD — AGM Information 2009

Nov 29, 2009

Chairman’s address

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TEYS Limited AGM

30 November 2009

Thank you for your attendance at this AGM of TEYS Limited.

The company has made a loss of $7,496,581 (including an impairment loss of $3,869,664) for the year ended 30 June 2009 compared to a loss of $508,047 for the year ended 30 June 2009.

On the day of our last AGM, 17 November 2008, the company received notice of legal proceedings for wrongful dismissal by two senior executives, Mr Ruygrok and Mr Brennan, claiming collectively damages of $2.1 million. This litigation has contributed to the loss of the company.

Ultimately these large claims were settled for relatively small sums of money. In Mr Brennan’s case, $50,000 for the claim and $15,000 for the costs and in Mr Ruygrok’s case, $50,000 for the claim, $15,000 for the costs and approximately $50,000 for the forgiveness of a loan owed by him to the company. The settlement of these claims was announced on 3 July 2009.

At about the same time as the company was engaged in the dispute with the former senior executives, on the property funds management front, the company was engaged in a substantial dispute with parties related to Mr Kim Burton and RFA Management Limited, a company previously managed by TEYS Property Funds Limited. At the time of Mr Brennan and Mr Ruygrok leaving the company I resigned as a director of RFA. Mr Brennan and Mr Ruygrok having exited the company, maintained their directorships of RFA and worked for a time with Mr Burton. Ultimately Mr Ruygrok and Mr Brennan resigned as directors of RFA and following their resignations as directors of RFA the company was able to come to a settlement of over $10 million worth of claims with Mr Burton on behalf of RFA. We are pleased to advise that since affecting the settlement we have established a very good working relationship with Mr Burton which we hope will lead to new opportunities for the company in funds management in the future.

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During the year litigation was also settled with a former partner in strata management, Ms Carolyn Sargeant for the sum of $20,000 inclusive of costs and a former partner in funds management, Mr Geoffrey Booth for the sum of $45,000.

This unfortunate litigation involving the public company and its subsidiary, TPL Holdings Proprietary Limited, has taken its toll on the company not only in the market but also internally and I am pleased that it is behind the company. I take personal responsibility for the circumstances giving rise to these claims and I apologise to the shareholders unreservedly for the impact of these circumstances on their investment in the company. I am personally committed to the continued stabilisation of the company, the sale of our major trading entity (about which I will speak shortly) and repositioning the company to take advantage of future market opportunities in strata and funds management.

An aggressive cost cutting program began immediately following our last AGM in November 2008. This has mainly centred on head office in Sydney so as not to undermine the work of the strata management offices which remain the major asset of the company. The head office staff numbers have been reduced from 20 to three over the course of the year. Remaining in head office at the moment are myself, my assistant Ms Kate Sommer and an accountant, Mr Angie Luis. Our work during the year has mainly been concerned with the settlement of litigation, dealing with our banker in difficult times, more recently working on the sale of strata management assets and seeking to improve the company’s fortunes in funds management to maintain the company as a listed entity.

The remaining fixed overhead of the company is the rent on premises in Sydney surplus to requirements. All efforts have been made to sub-lease the suites we occupy at Jones Bay Wharf, however, in this market that has been unsuccessful. The lease on the larger of the two suites we occupy ends in January 2010 and we have provided notice to vacate at that time. The lease on the smaller of the two suites expires in June 2010 and again we have given notice that we will be vacating that suite when the lease expires. To take the company forward in funds management we can be accommodated in much smaller premises at a cost of approximately one quarter of the rent paid in the past year.

Despite our cost cutting efforts it has been necessary to sell the majority of our strata management assets in order to reduce debt. This decision was made by your directors against the background of a market in which, in our judgement, it was impossible to raise further funds to reduce debt and maintain a strategy of aggregation of strata management, at least with the diverse portfolio we have amassed to date. We have a short term debt facility of approximately $830,000 which is repayable at call. No call has been made but we fear that if our divestment

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program stops, then we will not be able to continue in business. Having come to this realisation, in August 2009 we began a formal divestment program. We firstly sold our interest in our Sunshine Coast strata management business to our partner for a significant profit. This sale was followed by the sale of our strata management business in Como which was our only loss making strata management trading entity. Our divestment program culminated in the announcement on 24 September 2009 of a sale of all of the remaining strata management assets for $7.2 million.

This sale is subject to shareholder approval and a meeting will be convened in the near future to consider, and if thought fit, approve the sale of this major undertaking. It was not logistically possible to put that resolution to this meeting and therefore debate and determination of this will have to await another meeting which we expect will occur in mid January 2010. The parties are in all respects ready to settle immediately if shareholders approve the sale. The purchaser’s due diligence and finance arrangements have been satisfactorily completed. I wish to place on record my thanks to the purchaser, Whittles Australia Proprietary Limited, for the thorough and considerate way in which they have gone about conducting their enquiries and to my staff who have cooperated fully with the purchasers. There has been no dislocation to client services in strata management during this period and it is now in the interest of all parties that the formal process be concluded as quickly as possible. Solicitors and advisors have been appointed to assist with this work.

Assuming the sale is approved, the company will be left with our funds management business and a significant and successful strata management undertaking in Brisbane where our interest is worth in the vicinity of $1 million producing net income of approximately $200,000 per annum.

On the role of our company in funds management, during the year we have vacillated. This reflects the turbulent property investment and finance market in which we find ourselves. Having previously considered disposing of the funds management business to a related party we have now determined to hold the asset to explore what appear to be significant opportunities to use our syndication expertise to provide much needed private equity to developers of residential and commercial properties. There is a shortage of supply in Sydney and Melbourne of residential and mixed use developments and banks have substantially tightened their lending criteria such that developers need to find passive investing partners which we believe we can deliver. Although funds management has been a poor contributor to our profits since re-quotation, at the time of re-quotation it accounted for the bulk of our profit and we believe these days will return. The workout of our existing mortgage portfolio will provide the basis of this resurgence of funds management.

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I am pleased to announce today the appointment of a new director to the funds management company, Mr Brett Johnson, who is the Managing Director of Quartile Property Network. Quartile Property Network is a specialist property investment organisation with over 40 years of experience in advising private investor clients and actively managing residential property for investors throughout Australia. The business commenced in 1953 originally as the DF Johnson group of companies which is regarded as the founder of syndication in Australia. Brett is the co-author of ‘The Wealth Power of Property’ 1997 and has accepted a position as a non executive director and Responsible Manager of the company. Brett’s property expertise will enable the funds management company to broaden its scope and to take on new work as well as completing the development of currently managed properties. His appointment formalises a long standing strategic relationship with myself and TEYS Property Funds Limited and will add value to future syndicated residential and mixed use projects, particularly accessing investors of strata titled property as an exit for our syndicate investors.

I wish to thank the strata management teams who have continued to supply a very dedicated service, despite the disruption that came, from a long sale process. I also wish to thank my very dedicated remaining senior management team. In particular I would like to thank Mr Duncan Lee and Mr Neville Sanders who are senior executives of the company and whom have additionally served as directors of the company since June 2009. They have worked under difficult circumstances for very modest remuneration for their services as directors and I thank them for their diligence, loyalty and support. I would also like to thank my assistant, Kate Sommer, for her unwavering support and flexibility.

I look forward to completing my efforts to stabilise the company and position it for a return of shareholder value from future opportunities.

Michael Teys

Chairman and Chief Executive Officer

TEYS Limited

Sydney

30 November 2009

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