Ann: Exploration Decline Commences at Dalgaranga, page-91

Euro Hartley’s are assuming POG goes down year on year from the current level in 2025 and 2026 ( see image below) and I assume lower still in 2027 to 2029. Their WACC of 12% is quite high eg DEG used 5% and I have not see any above 8%. However, I consider anything below 10% as too low.

The second image below shows how pessimistic analyst forecasts are for POG using silver as an example. The views of analysts contrasts with many banks who are looking at prices of $3,000 in 2025 and beyond. A real disconnect in my view. You have analysts projecting an ever increasing copper price but falling POG and silver.

Their bull case of 1.9m Oz does not seem that bullish in my view (see my earlier post from today) as it basically assumes very little further growth in resources.

In addition they are valuing OBM at a target price for a MC of about $1.4b which compared to SPR, will have a much higher AISC (see figures in image below) and only production of about 155k Oz in 2026 yet SPR MC valuation target of 1.8b their production will be not far off 50% above OBM.

OBM has an MRE of 1.95m Oz @ 2.6g with a tiny reserve of 0.19m Oz with most of the production in 25 and 26 being UG mining at a grade of about 3.75g/t - so implicit is a much lower grade in subsequent years. In addition the UG resource where most of the production is sourced from is only 0.77m Oz including indicated of 0.325m Oz - of that UG resource 250k Oz is being produced in 25 and 26 FYs. Compared to SPR the mine life is barely 5 years for the UG and then they are left with much lower grade mainly OP ore.

Maybe I am biased and this is just a high level comparison but their valuation of SPR vs OBM seems very inconsistent. I suspect one reason for the comparative high valuation of OBM to SPR is driven projecting a lower much POG when SPR is in production with a WACC of 12% plus a rather pessimistic view of what SPR production profile will end up being in contrast with a much higher POG when OBM are in production.

Did someone post that Euro Hartley’s clients have been net sellers of SPR? If so I understand the reason - ie they believe SPR is fully valued.