Ann: 2018 Notice of Annual General Meeting, page-119

"and zeb/woll, the SP equivalence for POS with WSA MCap is A$632M/2600M = 24.3c
dont know where you got 14c from?!
14c is higher than PAN MC but less than 24c of WSA MC."

Yes, it's 24c. I meant 24c, but fat thumb syndrome on the keyboard... Apologies for the typo.

"Also zeb, the 27kTpa Ni on Lionore figures were for low grade ore at 0.4% from black swan only not from lake johnston, as I pointed out, my grade average was 3% = 81kTpa based on 2.7MTpa processing capacity at both. This grade is based on higher grade at LJ and SS."

No, that's incorrect! Have you actually gone through the old LionOre MD&As and Norilsk Annual Reviews and related them back to our current JORC statements and also our BS FS announcement?? The Ni grades from those old reports and also our current published JORC Reserves & Resources grades are at odds with your assumptions - particularly in relation to the BS complex Ni grades! So are your capacity utilization assumptions for BS!

I'm going to have to break this down, in the interests of full substantiation, which interested readers (Bueller, anybody?) can verify for themselves.

My ~27Ktpa full production estimate (both plants) is based on ~16Ktps (BS) + ~11Ktpa (LJ) of contained Ni metal produced, not the larger "concentrate" number that you suggested. My estimate would translate into ~180Kt of concentrate produced (assuming ~15% Ni contained within the conc.). The BS production estimate is the expected production of the entire BS complex (i.e. the SS U/G mine and the BS open pit). That's very important and cannot be ignored (read on)! The combined processing capacity (both sites) is actually 3.7Mtpa (1.5Mtpa + 2.2Mtpa), not your total 2.7Mtpa. (Presumably that was a typo, which I can understand... )

(NB: LionOre owned BS and LJ prior to mid-2007. In mid-2007 Norilsk performed a 100% takeover of LionOre, so Norilsk is the info source after 2007.)

Black Swan Complex (SS U/G Mine and BS Pit):

Yes, SS has 5.8% Ni grade ore (current JORC Probable Reserves), but it's only on 57Kt of ore to yield 3.3kt of contained Ni metal. Blend that with the BS open pit with its 0.63% Ni grade (also Probable Reserves), which contains the lion's share of 3,370Kt ore to yield 21.5kt contained Ni metal and the implied mathematical weighted average grade yield for the whole BS complex comes down dramatically to somewhere a little above 0.72% (staying with Probable Reserves only for the moment).

If we expand the scope to also include Indicated Reserves, then SS adds another 52Kt of ore with an impressive 9.2% grade to yield 4.8kt of contained Ni metal, but it's still only 4.8kt. The BS pit Indicated Reserves add another 9,600Kt of ore with a slightly increased grade of 0.68% to yield 65kt contained Ni metal.

Those headline-grabbing SS grades are awesome, but you're only talking about contained Ni metal of 3.3Kt (Reserve) and 4.8Kt (Indicated Resource). Once they are blended with the much lower 0.63%/0.68% grades of the BS pit it results in much lower overall Ni head grades of around 0.72% (Reserves and Resources).

If you look at the historical LionOre MD&A stats you'll see that the Ni grades move around a bit, ranging from 1-2%. However, this is somewhat misleading because most of the LionOre MD&A stats (reports) pre-dated the 2007 ramp-up of the open BS pit mine after the 2006 processing plant upgrade to 2.2Mt p.a (up from the previous 600Mt p.a). The most recent quarterly LionOre MD&A that I have found (Q1-2007, released 14/05/07 - prior to the Norilsk T/O) showed that the plant was operating "beyond operating capacity", as follows (remember, these are quarterly production stats):

- BS open pit: 519,312 tonnes mined at 0.63% nickel (LionOre Q1-2007 MD&A released 14/05/07, p.10).

- SS U/G mine: 23.890 tonnes mined at 4.36% nickel (same source).

- Implied weighted average Ni grade: 0.79% (my calcs from the above raw numbers - close enough to LionOre's published 0.80% Feed Grade in the table on p.4).

Also, POS management has adopted an anticipated "ROM diluted Ni head grade" (aka my "weighted average Ni grade") of 0.75% in its current BS FS metrics. I don't think it's any co-incidence that this budgeted 0.75% sits half-way between the implied 0.72% (per above) and LionOre's Q1-2007 production stats of 0.80%.

So we can see that 0.75% Ni grades from the overall BS operations is much more realistic. It's a far cry from 3% (which overstates reality by a factor of 4x).

At full capacity (2.2Mtpa) with Ni head grades of 0.75% you get max. ~16Ktpa Ni metal (rounded down from 16.5Ktpa) from the BS complex. That's Part 1 of my max. production estimate.

However, the current BS FS only has enough ore to feed through at 1Mtpa (i.e. 45% utilization), so ~7.5Ktpa Ni metal production is the current expectation for the BS complex... plus the prospect of doing some tolling for third parties through OTCPA to generate some extra coin.

Hopefully management can take to the drill to prove up more reserves in SS deeps and the BS pit to feed the concentrator with our own ore.

Lake Johnston:

- Mining activities suspended 2009 by previous owner (Norilsk). Re-started June, 2011. Suspended again April, 2013.

- Norilsk Annual Reports are on a calendar year basis.

- Norilsk 2008 Annual Report: LJ production throughput 1.391Kt @ 1.53% avg Ni grade. Produced 8.85Kt saleable Ni. (pp. 61-61, 70)

- Norilsk 2011 Annual Report: Maggie Hays (MH) Reserves were 1.2Mt @ 1.35% Ni grade. Mining activity restarted in June 2011. Limited processing throughput in second half during re-start ramp-up showed 209Kt mined @ 1.4% avg Ni grade. 200Kt processed to produce 1.7Kt contained Ni in concentrate (i.e. 13Kt of conc. produced). (All p.73.)

- Norilsk 2012 Annual Report: MH Reserves were 0.95Mt @ 1.26% Ni grade. MH Resources were 5.8Mt @ 1.71% (pp.48 & 50). (Emily Ann was abandoned.)

- 2012 MH actual production metrics: 954Kt mined @ 1.25% Ni grade (pp.60, 67). 984Kt processed to produce 8.975Kt contained Ni in concentrate (i.e. 66Kt of conc. produced). Note that this was 984Kt throughput represented only 66% of utilization of the nameplate 1.5Mtpa processing capacity.

POS' current JORC statement shows no Reserves for LJ (MH). Indicated Reserves for MH are 2.6Mt with 1.60% grade to yield ~42Kt of contained Ni. Not a dreadful number, but it's underground, which needs to be factored. Remember, these are Resource numbers and far less reliable. That said, the grades are within the range of historical experience.

As we can see, an expectation of 3% for MH is also quite unrealistic atm. There's plenty of actual historical mining evidence to show that MH is closer to 1.25%-1.5% Ni grades.

Abi Rose is showing some promise, though. Promise enough for average 3% grades? Well, the jury's out on that. We'll have to wait and see how the drilling program plays out. Hopefully some good news forthcoming on that front. We could do with a win.

LJ production numbers are a bit of a wild card. It all depends on: a) finding an economic resource; and b) what the average grade is.

- At 60% capacity (0.9Mtpa) with avg Ni grades of, say, 1.25% you get ~11Ktpa Ni metal (i.e. my original max. estimate, based on the current known knows.)

- At full capacity (1.5Mtpa) with avg Ni grades of, say, 1.25% you get ~19Ktpa Ni metal.

- At full capacity (1.5Mtpa) with avg Ni grades of, say, 1.50% you get ~22Ktpa Ni metal.

- At full capacity (1.5Mtpa) with avg Ni grades of, say, 3% you get ~45Ktpa Ni metal!

Admittedly my max. ~11Ktpa estimate for LJ might be potentially conservative, but you need to understand that, unlike BS, LJ currently has no Reserves. Abi Rose could change that, but by just how much, exactly??

It's worth noting at this juncture that MR has publicly mentioned hoping to find ~50Kt contained Ni metal in Abi Rose, which gives us a bit (a lot) of a hint as to what to expect from that particular ore body. Yes, we could be massively surprised to the upside, but expectations should be managed for the real world.

Summary:

In any case, I hope this clearly demonstrates that 81Ktpa company-wide Ni metal production belongs in a different universe at this stage, based on current BS Reserves and BS/LJ/Windarra Resources. Abi Rose is the current wild card, but it's highly unlikely (imo) that it alone will get us from ~7.5Ktpa Ni metal (current BS FS) to 81Ktpa. Several more economic finds would need to be made for that particular production target to be hit.