Ann: March 2023 Quarterly Activities Report and Appendix 5B, page-13

"We've just announced a massive capex increase and a ~7.5% reduction in IRR, which I note is ungeared. The Epanko update is incredibly disappointing. I'm bewildered as to why we abandoned Kwinana to prioritize Epanko."

Focusing on small movements in IRR is not what I'd expect in robust analysis of this update but given you have raise the point - Yes the IRR has reduced from 38.9% to 36% which as you note is a 7.5% reduction. 36% is still a very robust IRR. I'd note that as soon as IRR's get to higher values they lose relevance as a robust decision making tool and also become incredibly sensitive to short-term modelling decisions. For example in the table below changing the 30 to 0 lowers the IRR to 33%. Changing it to 79 increases it to 42%. The effects are even stronger for yr1 changes.

The table below is a really crude view of what you describe as disappointing financials. I haven't fiddled to get the NPV down to $348 rather than the $377 shown below but its close and only modest changes could achieve this. If borrowing was added, the net capex cost would drop and the early years net inflow would reduce modestly as the loan was repaid. These changes would increase any IRR so an ungeared IRR is a worst case not a best case value.



Factoring in depreciation, tax and owning 84% of the project Epanko on these finances could be delivering after-tax net surplus's to EGR of around US$40m/yr with expansion potential. If successfully delivered, this alone would put EGR's share price north of A$500m. Its currently under A$100m, although the project is not yet fully funded.

If EGR can get this into production and deliver something close to the financials forecast, it would be a very favourable outcome and also provide cashflow to build a larger number of downstream plants rather than just sell graphite flake.