Ann: Trading Halt, page-67

Rather than give you my specific thoughts, here are metrics from 3 comparable projects:

GL1 (Manna - Western Australia), AKE James Bay (Quebec Canada) and SGML (Sigma) Grota Do Criilo (Minas Gerais Brazil)

A few comments on these 3 studies. The GL1 study was perceived very negatively by the market. They've got a $435m capex estimate while their market cap is currently only $366m i.e. they would need to issue 118% of their current SOI just to fund their capex bill (clearly not feasible). Awful strip ratio (22:1) and they've gone with a very bullish (compared to other company scoping studies) $2,500/T long term lithium price).

The AKE study was completed in 2021 and they updated their costs this week (showing significant increases in opex and capex due to inflation - these numbers are included below). However, being in Canada, they still have a lot of permitting still to go (even though they've been trying to get approval for many years already). On the positive side, their strip ratio is phenomenal (3.6:1) i.e. their pegs are very flat laying and close to surface.

I'm not financial guru, but my understanding is that the AKE NPV appears relatively small ($1.7bn due to the study considering a 19 year LOM which discounts the cash flows significantly in those later years of the project). This goes to show that the headline NPV can not be considered in isolation and needs to be analysed in the full context of all the other aspects of the project. The market also won't react to a big NPV number necessarily (GL1 is capped at $366m despite the $2.8bn NPV).

Sigma, nothing much to add as their project is already fairly well known on this forum. Ridiculously low capex and opex numbers considering the size of the operation, however what's interesting is their fairly mediocre recovery rates - so it will be interesting to see what recovery rates are used in our study.

NPV: GL1 - $2.8bn (pre-tax as the company did not provide a post tax number), AKE - $1.7bn post tax, SGML - $15.28bn post tax)

Output: GL1 - 221ktpa, AKE - 311ktpa, SGML - 766ktpa

LOM: GL1 - 10 years, AKE - 19 years, SGML - 13 years

Strip Ratio: GL1 - 22:1, AKE - 3.6:1, SGML - Ranging from 12.5:1 to 16.4:1

Recoveries: GL1 - 70%, AKE, 70%, SGML - Ranging from 50.6% to 65%

Long term lithium price used: GL1 - $2,500/T, AKE - $1,001/T, SGML, $1,500/T

OPEX estimate: GL1 - $688/T, AKE, $407/T, SGML - $401/T

CAPEX estimate: GL1 - $435m, AKE - $381.5m, SGML - $291.3m

Payback period: GL1 - 15 months, AKE - 1.4 years, SGML - 1 month