Ann: Quarterly Activities Report, page-7

One of the interesting questions (to which there is no perfect answer) is do you mine the cheapest ore first, or do you keep a patch of cheaper to mine ore in reserve for one of the likely future low-price periods that will probably repeat for lithium between periods with really good lithium prices. If for example a year's or more worth of cheap open pit ore from Sister Sam could potentially be kept in reserve. If prices are high it doesn't matter as Delta would be mining average cost ore, it would making money.

If prices were to fall to US$1,000 or below again, the mining plan changes and starts mining this cheap ore. Profits continue to be reported during the down cycle. Delta in keeping ok profits, even during a down cycle in prices would assist higher earnings multiple applied to the earnings being reported. This would assist a higher share price because earnings would be more stable. Sister Sam with the waste removed gold would work rather well as that sort of low priced ore insurance scheme. It would also mean that on a BAU basis, Delta could prudently operate with lower cash balances than if it had to potentially cover loss making periods if prices were to collapse again. If a boost was needed to earnings, Delta could dip into Sister Sam and take some cheap ore. The down side of doing this is that the cheapest and easiest ore to mine isn't converted into cash first.

With CE at the helm, some of this thinking will already be under consideration. In one of the recent MinRes calls he noted how the recent period of high prices had been used to undertake a large strip back at Mt Marion. CE realised prices don't remain high all the time and the best time to get rid of a lot of waste rock above an ore body is when the ore being recovered can be sold for really good prices. It sets up MinRes to have a lower cost structure in periods when prices are average (or lower).