Ann: Rincon Lithium Project Update, page-245

Just a few comments:

1. Lithium spot prices down from 93,000 CNY/mt to 85,900 CNY/mt over the last month and falling. Prices in US$ down to US$10,422/mt:



2. The 20 mt AGY sold it received a price I believe close to the China Spot Price;

3. It is my understanding that most of the costs of operating these plant are fixed/period costs. Consequently, cost of production per mt are dependent on throughput.

4. ME's Research Report has cash operating costs for 2025 at A$17M with an ASIC cost of US$7,895/t;

5. What this means is that if the plant produced 2,000 tpa, the cash cost per mt would be A$8,500 per mt. If they produced only 1,000 tpa, the cash costs would be A$17,000/t and if they only produced 500 tons the cash costs would be A$34,000/t;

6. If the company is forced to sell at spot prices then as the spot price falls the cash flow breakeven production level needed to breakeven rises.

What this means is that both the level of cash losses during ramp-up increase and the level of production required to breakeven also increases. This means larger losses per month for more months to breakeven;

I suspect they have looked at their projected production levels and current spot prices and have decided it would be preferrable to wait to ramp-up production when there are higher spot prices when the level of cash out flow will be less per month and the breakeven production level will also be at a lower level.

Regards

SP