Ann: Mt Edwards Nickel Demerger Update, page-119

Hi rpower80

Mincor were estimating circa just under AUD $4.00 per pound All-in sustaining costs. The price you are referencing above of $ 20 / Kg is a USD price, so converting current LME spot nickel price of today of $19500 USD per Tonne, gives AUD 26,300 per tonne or $ 26.30 AUD per Kg. That is about $12 per pound.

Mincor who are nearby have higher grades than us but after the spin out, a new drill campaign will be necessary both for infill and extensional drilling so there is scope for us to increase our grades in this process. Also we could have quite a bit of by-product credit from gold and palladium, but we need more information to quantify this. I would be conservative and work on $ 5 per pound which should cover worse case scenario of by-product credits are reasonable.

Also what you need to factor in is that we most likely will use the bhp concentrator which means low capex start up position. Upfront capex costs then would be mainly mining preproduction costs around stripping , basic mine infrastructure, equipment etc. However offsetting that the rumour is Mincor only get paid circa 70-75 % ( its a confidential agreement, hence the information is not publicly available) of the spot nickel which is the fee for paying the price for use of the BHP concentrator. The supply ends up in the bhp supply chain too, so you have a guaranteed offtake too as part of this arrangement, but on the flip side your not free to sell it to whoever you feel like. Note too in your calculations you dont get 100 % recovery of mineral from the Ore, figure I think is closer to 85-90 %.

The other thing is how much access will we get to the concentrator, if we go down that path ? Mincor have an agreement for 200,000 - 600,000 Ton of Ore per year . My research suggests the concentrator capacity is around 1.60 M Tpa, so there should be plenty of scope for us to do a deal with BHP too as they will want to get back to full capacity utilisation. Note there maybe other options too but.

Likely POS will get back into action as well and I think they have processing capabilities too.

My gut is a new drilling campaign could take the resource well past 200,000 Tonnes to, so I would see some upside to that 160,000 number. Expect a lot of newsflow once this nickel vehicle is spun out in the next 12 months and this should drive the price pretty quickly if they hit the ground running as they will work to a dfs and there is much work to do and much work that can be done relatively quickly to bring this production back online. I would spend some time reading Mincor's recent announcements to get a flavour for what sort of market cap could be generated here in the long run if we have success in both drilling and getting access to the bhp concentrator.