Resource calculation, page-5

A while ago I calculated a resource for the area using the formula:
Strike Length * Width * Distance * specific gravity (which is 2.8 by the way). Initial calculations are in this post and link to specific gravity: Post #: 26518689

Now before I go on I agree with you that the current program will not achieve some of the pie in the sky resource figures floated on this forum through the current exploration program, and if you read the next embedded post you'll understand I agree with some of your comments. Obviously future programs will go a long way as well. More recently I posted that the current exploration program will not define a proper JORC for the entire area (meaning a measured and indicated resource - see below) but I suspect they would get enough of a resource around holes 1 and 2 (and maybe hole 7) from this exploration program to be able to commence with a 5 million tonne per annum facility for 20 years, 10 million tonnes per annum for 10 years (and then do the required infill to get a JORC for the whole area so as to sustain operations for a very very very long time) - see Post #: 31319446.

A key to a previous AVZ Ann is the term homogeneous which means for the area around hole 1 and 2 (and probably 7) you do not need 50 metre spacings (and in the embedded post below I assume 75 metres might be adequate). Certainly in the areas around hole 3 - 6 you will need 50 metre spacings IMO.

So using a 40,000 metre drill program at 250 metre depth, your 200 metres of spod gives you the following:

200 * 200 * 3000 * 2.8 = 340 million tonnes of ore. So probably looking at an initial measured (and indicated) resource of some 300 million tonnes to 340 million tonnes IMO. That will be enough to start mining operations noting PLS committed to mining with a much a lower resource estimate btw and lower grade, but take your point btw as well. So, 4 holes for the width gives 40 rows times 75 metres for length.

So be interesting whether the drill bit around holes 1 and 2 (and if get to hole 7) are homogeneous because if not then the drill spacings will need to return to 50 mettes. I suspect very few holes will be drilled around holes 3 and 6 as their aim would be IMO to prove up enough of a resource to go mining (or to be taken over) and to prove up the rest of the resource later on - just the way typical large scale producers operate - just refer to what happens in iron ore sector and even at Greenbushes and even what PLS is proposing to do now). Just a guess, but this has been my view for some time btw.

Obviously the term homogeneous is a key but the point is this drilling campaign should be able to identify further resources and agree the current projections sprouted by some based on the current drilling program appear high (albeit suspect they will have a large bucket of resource in the inferred category). Whilst I was disappointed in yesterday's Ann, a key term term in the ANN was the mention of a pre-feasibility program. I suspect what they are seeking to do after this initial exploration is move the resource from the measured and indicated category - confidence level 70% - to the proven and probable reserve category - confidence level 90% - which underpins mining (what goes into bankable studies). The key to the current JORC is getting a measured and indicated resource initially as that is what forms the basis of mining decisions, i.e. moving to the next stage, but suspect the placement is about evaluation and moving the resource to the proven and probable reserve category. Inferred just means there is something there but more work is required and inferred resources are not the basis of mining decisions (not directed at you but others who might read this post). Here is a pic on what a JORC is seeking to achieve. All IMO

The other thing to note here is that the perceived AVZ grade is estimated at 1.5% Li20, which essentially means you need 5 tonnes of ore at a 80% recovery rate to get to one tonne 6% spodumene concentrate grade. For comparison purposes only PLS only grades 1.25% Li20 so requires around 6 tonnes of ore to produce 1 tonne spodumene concentrate, and for avoidance of doubt PLS's measured (and indicated) resource from recollection was less than 120 million tonnes before they committed to mining - www.asx.com.au/asxpdf/20160222/pdf/43574xcbsv0vg2.pdf - obviously doing more drilling since then to now plan for an ore feed scale of 5 mtpa.

Wasn't going to respond initially as thought others would but two VBs later I thought what the heck. All IMO IMO IMO. Yesterday's Ann IMO if anything should reduce expectations here around the near term likelihood of a (Chinese-based) TO. . Anyway time will tell. All IMO