Ann: Investor Presentation - RIU Explorers Conference, page-65

Pure Spod has a density of 3.15x and is about 8%. You don't get deposits of pure spod, you get deposits with grades like 1% to 1.5%. Using a density of 3.15x in any proxy JORC estimate is wrong.

An average grade like 1.5% is 19% spod (1.5%/8%) and 81% other material. Its the non-spod material in the pegmatite that pulls the blended density down to around 2.7x. For example in GL1's most recent JORC update they made the statement below where they used 2.72% for higher grade material and 2.68% for lower grade material. The higher grade material had more spod and that's why the density was slightly higher.


Given TG6 has noted similarities to geological structures, the table below notes densities used by Mt Holland (Earl Grey) deposit. You will note the Fresh Pegmatite - SQI has a density of 2.7x.


Applying a cutoff
I don't understand your application of a 0.85% cutoff into the calculation. With most deposits there are areas of higher and lower grade. Below a certain grade the material becomes uneconomic to process and flips into the waste material category. That grade has typically been around 0.5% for WA deposits although in the recent higher price environment lower cutoff's like 0.3% or 0.2% have occurred. Because the cutoff relates to the point where ore stops being included into the calculation of the total volume, it makes no sense to be multiplying a volume by a 0.85% cutoff.

So if you had a ore body that was very big at 1500m by 425m by 17m it would be 10.8m cubic metres of ore. I've applied the 50% risk by lowering 850m to 425m. 10.8m cubic metres is about 29.3Mt of ore which is likely to be somewhere around a grade of 1%-1.5%. If you were to do a DSO mining operation, you would have around 29Mt of ore to mine. The problem is that cumulative mining, basic crushing, trucking and then shipping costs could easily exceed US$100/t meaning DSO frequently isn't economic at current prices. Simplistically profitability = 29.3m * (US$100-US$100) = $0. But as an in-ground value the figure of $100/t relates to 1.2%-1.5% ore so no further adjustments are required. $2.9b would be the inground value ($100/t * 29.3 million tons) but its a meaningless figure due to mining, trucking and shipping costs.


If you were to mine all 29.3Mt over perhaps 20 years (and most mining plans miss some of the ore) and it was 1.4% and concentrated to 6.0% with a 70% recovery rate it would become 4.8Mt of SC6. The price of SC6 has recently fallen below US$1,000/t but using this you have US$4.8b as the spod value of a 29.3Mt resource. That uplift from $2.9b to $4.8b while dropping the total volume that would need to be trucked and shipped from 29.3Mt to 4.8Mt is why concentrators are built onsite despite costing several hundred million. Its also why you can get multi-billion NPV's from scoping studies involving a few 10's of millions of JORC.

At the moment however TG6 has one pair of robust drill holes and one more that I think is 360m away. A lot more drilling and results are needed before this is anything but hypothetical pondering.