Should Wodgina shut?

Wodgina ShutdownBreakeven SC6 Price Analysis

We ran a simple model on Wodgina using the latest MinRes numbers andcurrent spodumene spot of $626 USD/t.

Based on ourassumptions, Wodgina is just staying above water — but only thanks to internaluplift and avoided shutdown costs.

at a high level we arrived at the breakeven $442 per tonne of SC6, in USD by reference to:

• MinRes gets $297/t in revenue (50% share of $626 after dedducting a 5% royalty)
• FOB cost is $775 AUD/t, which converts to $511 USD/t — but because MinRes only owns 50%, their share of that cost is $256 USD/t
• We estimate 35% of sustaining capex can be avoided if the site is shut. That adds ~$51/t to the avoidable cost calculation
• MinRes earns additional value from its mining services business — $5.88 AUD per tonne moved × 8.1 tonnes moved per tonne of concentrate equals ~$31 USD/t in uplift
• We also include a price recovery “option value” of ~$16/t, based on the chance of prices rebounding to $900/t over the next year and avoiding a 6-month restart lag

So MinRes currentlysees an economic margin of ~$87/t by staying online — made up of $37/tin core margin plus ~$50/t in value from not entering care &maintenance.

At lower prices, thatmargin disappears fast:

• With optionality and 35% avoidable capex: breakeven is ~$442/t
• Without optionality: breakeven is ~$475/t

I’ve included a summaryslide showing the breakeven range, and a snip from the simple model showinghow we arrived at some of the figures:

Here’s the link to thefull article with all the workings and assumptions: https://www.goldrockcapital.com.au/analysis-notes/should-wodgina-shut

Keen to hear other views on assumptions and whether Minres should shut wodgina.

Cheers!