Ann: HPMSM Feasibility Progressing on Schedule for 2022 Delivery, page-7

@Lockyg101 Strange suggestion - where will E25 source the material for the HPMSM?

The January announcement was 78.4kt of ore to produce 50Kt of HPMSM at an estimated US$1,950 and 16.6Kt of FGMSM at US$900/t. This announcement improves on this noting 75kt of butcherbird ore to make 65kt of HPMSM.

The following calculations may put into context the scale of the HPMSM opportunity.

Table 2 of the January announcement noted non-ore conversion costs of $393 to $414/t. The estimated price of HPMSM was $1,950/t. Lets assume the conversion cost was $400/t but inflation has increased this to $450/t. Now we deduct these costs from the price of sale and what is left is comparable to sale prices of Butcherbird ore. To be more conservative, lets drop this $1,500 net price by 20% making it $1,200/t (net of non-mining costs).

Option 1: 75kt of perhaps 32% butcherbird ore is sold at US$4 to 5/dmtu (net of shipping / grade discounts to 44%) = $9.6m to $12m revenue
Option 2: 75kt of ore becomes 65kt of HPMSM and is sold at US$1,200/t (as per above). This would be $78m revenue (from the 75kt of ore, and any food grade MSM revenues are ignored). This is broadly similar to selling the ore at circa US$32.5/dmtu ($78m/75kt = $1040/t / 32 grade = $32.5/dmtu)

If Butcherbird ore can be further processed enabling effective sale prices around US$32/dmtu then the existing operational issues around price won't be an issue. Also if there is something akin to US$32/dmtu pricing available, there's a lot of scope for a deal to be struck that lowers this price a little with pre-funding that assists capital costs of the facility.