Ore sorters, concentrators and iron grade discussion, page-11

So a few things can be learnt from the unfortunate saga of Bald Hill:
1. Grade matters - average processed grades like 0.9% are problematic because you can need over 10t of mined material for one ton of concentrate to get one ton of concentrate (eg in June Alita used 406kt of ore for 37.9kt of concentrate (10.7t)). High grade projects can be much lower in the 5-6t range.
2. Strip ratios matter. If like Bald Hill you have 10t of ore for a ton of concentrate and >10:1 strip ratios then there is over 100t of mining costs for each ton of output. Its very hard to be even a mid-cost operator with that cost structure.
3. Some offtake partners don't honour caps and floors (a US$680/t floor and US$1,080/t ceiling was agreed for the Bald Hill offtake). They are not a foolproof solution.
4. Its important to understand the concentration process and what losses there might be to fines, particularly if the strip ratio is not super low meaning significant mining costs are being incurred in generating the material that becomes fines.
5. Lithium feed grades above mined grades are problematic. It means that the "better" ore is being selectively chosen from the ROM to process and the lower grade material is being left behind on the ROM. In Mar19, The Bald Hill grade mined was 0.81% but the grade processed was 0.89%. In June the grade mined was 0.76% but the grade processed was 0.90%. What was on the ROM still to process was becoming super-low grade.
6. Appropriate capitalisation is needed. A whole pile of debt may look fine in the financials like IRR, NPV but it can turn to custard if prices fall.

• Points 3-5 are not yet applicable to TG6. So far TG6 has been reporting drill intercepts of ~1.4% range so they have grades nearly double Bald Hill which will help economics.
• Its still early stages but I'd like to hear TG6 commentary around sub 20:1 strip ratios being targeted while the plan remains open pit.
• TG6 remains well capitalised for what it is doing (currently).