Banter and general comments, page-26567

"are we up for $50 milion each for the other pits? I'm personally hoping for discovery of another BP33 size resource which would move the smaller mines timelines to development back behind such a discovery. Thoughts?"

IMO there will be significant access costs for any Finniss deposit. There is substantial weathering in the Finniss region so you don't get the near surface or at surface intercepts the way some WA and overseas lithium sites do. In some instances it may possible to reuse existing pits as part of the decline to other deposits which will limit costs for some new deposits near an earlier open pit mine. The plan Core had for mining Carlton underground mining as at the 26 July 2021 DFS involved using Grants pit so costs which may lower Calton well below $50m(see picture below).

However, with higher the spod price the initial capital costs become less important as its a smaller percentage of the revenue anticipated to be generated from the new deposit. For example, consider spending US$50m to develop a new resource. If you get US$300/t EBITDA margins and for simplicity pay 30% tax on EBITDA, its necessary to extract 238kt of Spod before you have recovered capital costs and would take several years. If however you spend the same US$50m and get a US$3,000 EBITDA margin and pay 30% tax, only 23.8kt of Spod needs to be sold to recover the capital cost which may only take months. At high Spod prices a deposit covers its development cost quickly making small deposits much more economic.

While high prices benefit everyone, they disproportionately benefit operators with multiple smaller deposits because the economic resource size grows. The number and economic size of smaller deposits increases. Given the resource presented, Core needs to develop the capability to get small deposits into production quickly. They appear to be developing this capability with recent BP33 approval notices.

Core is still to confirm its revised scheduling as it restates the life of mine. One option they will be at least considering is using BP33 and then Carlton as a backbone of regular supply. Around this other smaller deposits may be brought on, mined out and then closed down. This approach would have several smaller deposits being mined over the next 10 years but would also have annual production levels higher than circa 175ktpa. If the 2023 exploration season finds indications of a major resource, another development possibility exists. This developing this "new" resource as 2030's supply while possibly concurrently mining BP33, Carlton and others looking to aggressively mine known deposits out at perhaps 300-400ktpa.