Ann: A$100m Institutional Placement, page-181

When Ganfeng undertook a 4-year off-take with a NT start-up I suspect they thought this was the start of 10+ years of secure Spod supply for their hydroxide plants in China. If/when Core expands, that will be more material for us to process to Hydroxide (and make profits on). Along came Tesla and threw a spanner in the works. Hydroxide that seemed like a many many years away pipedream started to look more like a real possibility. Recent American legislation turbo charged this issue. Is the deferred signing with Tesla, Hydroxide and Ganfeng deciding to sell out of Core all linked? That's my guess.

Did Core need the cash for the currently stated purposes?
I'm not sure that they did. I don't mind that they raised extra cash because I'm pretty sure it will be usefully spent on expansion projects, although you don't need to raise cash in Sept 2022 to fund planned 2023 expenditure when you are expecting to be shipping product in 2023 at exceptionally high prices. I can't understand how you need $95m for Finniss lithium project costs to first production when the June quarterly report noted $31.6m had already been spent on PP&E towards a $90m project. There would also have been massive expenditure in July and August. To me there is still some smoke and mirrors around this announcement and the real plans.

You don't need to pre-fund in 2022 planned 2023 exploration/development expenditure when you are concurrently planning to be shipping Spod at extremely strong rates. At most you need to fund the first few months of 2023.

Rramp-up working capital requirements decrease when spod prices are strong because even partial volumes will cover BAU costs. If Spod prices were $1,000/t you need to ship a lot closer to nameplate to cover operational costs than if you are shipping at $5,000+/t. Core doesn't need to get even close to nameplate for Spod sales to cover operational costs and mean pre-funded working capital costs disappear. If costs are anything close to US$500/t on a planned 175kt volume then total costs are under US$100m/yr. At current spod prices, only around 2kt/mth of Spod is needed to cover working capital costs. US$5,000 * 2,000 * 12 = US$120m

What you do need a lot of extra cash for is:

• Showing that you have the startup resources to be real around building Hydroxide (and perhaps showing Tesla 50/50 is sensible)
• Looking at cash based acquisition/partnering options (aka inorganic growth opportunities noted in the slide pack)
• Having the confidence to FID BP33 development before the DMS plant provides cash flow
• Having the confidence to FID expansion plans before the DMS plant provides cash flow

There's also the side benefit of Global X and their US$4.08b lithium and Battery tech fund. This fund as an annual reconstitution schedule with changes made on the last day of October. This will mean they are confirming which changes occur to the fund around now. Currently it has PLS, AKE, MIN and PLL. It doesn't have SYA, LTR, CXO (or Sigma in the US) as under development lithium projects. This announcement will be in all the lithium media news channels. It potentially has Global X increasing their weighting and factoring in BP33 a bit more and thereby buying many million more shares next month than would have occurred in the absence of this CR.