Hermosa the monster, page-43

Thank you for the omnibus post, Desert. Clear thinking needs to be encouraged by all.

Hermosa is indeed a world-class project by scale, grades and jurisdiction. It is difficult for Mr Market to value it properly as production sits beyond his 18-24 month attention span. Acceleration under FAST-41 may change that abruptly.

S32 is well placed to realise its potential, drawing on Cannington experience, itself a world-class Zn-Pb-Ag mine. Equally significant is S32's very strong balance sheet and FCF to support development, also the grit and duration of GK & team.

I have no evidence the Khoemacau auction will be complete by mid-August. It may drag on for months longer as the vendors try to extract maximum value.

S32's publicly announcing their interest in K was unusual. A small yet strategic move, like P-K4 in chess. It signals a wider interest in the Kalahari copper belt, meaning it wants SFR too.

Then game plan contradictions appear: a K transaction, whoever buys it, puts a tangible market valuation on Motheo. It may actually be in S32's best interest to let K go elsewhere cheaply, if that is possible, take over SFR and realise the synergies in a JV.

The aluminium chain is about half S32's asset base. The 1H EBITDA from Al was weak, 2H should be better.

S32's 4Q Quarterly of production and realised prices is imminent and will shed light on this question - last year 25 July.

Ash