Ann: Phase 1 HMW DFS Delivers Compelling Economic Results, page-101

Right now, honestly don't know. Reading through the DFS in more detail (and some other material) raises more questions than answers for me. Should juniors even be using NPV8 anymore? Surely these things are at NPV10 the way cost of funding are going.

The big one right now is the LiCl pricing assumptions used; it is an opaque market so it is hard to test how fair these are (and I don't belong to the "just trust Daniel!" school of investor). For example, the Canaccord Research piece noted "LiCl attracts substantial discounts verses refined products" and they estimate a long-run LiCl price of around US$14,560/t. The Sprott Research note (heavily promoted on these threads and on Twitter) actually has an LiCl price assumption of just US$4,691/t (which does seem very low). Given LiCl is calculated as a payability % of LCE it's interesting that they've now moved to a far more bullish take on LCE. If you go back to the 9 December 2021 Updated Economic Study for HMW, they re-ran the numbers based on a long-run LCE price of US$18,594/t. Yet they are now working on LiCl itself being even higher than this??? If you took 72% of their earlier December 2021 LCE forecast, their LiCl pricing would be US$13,387/t.

So far, the pricing assumptions seem overly bullish. I guess I am being extra critical here because of the significant DFS delay - I'm keen to understand which pieces caused the delay and what levers they 'tweaked' to improve the economics (and how robust those tweaks really are). What is your take here, @paulgf? Always appreciate your measured insights. Cheers