There are a lot of favourable elements within the report.#1...

There are a lot of favourable elements within the report.

#1 there isn't a big equity raise across 2024 to 2026. Most would have been guessing that is the case. There is a $160m debt facility, but if E25 manages to get HPMSM running without ballooning shares on issue, the share price will be a lot higher than it is now. Good strategy, just quite a bit of execution risk still to go.

#2 The modelling has cash balances of $39m+ across 2023 to 2026 so that's a good margin of safety.

#3 When the modelling is extended to 2028 there's further upside on the $82m profit (45.2cps EPS) because 2027 only has 25kt of HPMSM sales which is below the 65kt planned train capacity. Not all the revenue / margin from the first train is included in that year.

#4 For the 2023 year (which is now almost half complete), the estimate is 1.1m tons processed at a head grade of 10.3% and 79% recovery

• At a final grade of 30.5% this would be 293.5kt
• At a final grade of 31.5% this would be 284.1kt
• At a final grade of 32.5% this would be 275.4kt

The modelling has a production volume of 276 so they believe the blended grade will be about 32.5% this year. Petra reports previously noted 30.5% grades so they have some evidence around actual/expected grade improvement. FY2023 is not going to be 32.5% if still running at 30.5% now.

#5. With 49.8kt mined in Q1 of 2022/23, the remaining three quarters need to be 226kt so back to a 75kt/qtr average for the rest of the year. Implemented or soon to be implemented changes are improving throughput back towards nameplate.

#6 For the 2024 year (to June 2024), the estimate is 2.7mt at a head grade of 10.3% and 83% recovery for a volume of 702kt. This is consistent with the upgrade being completed and operational during the Dec2023 quarter. Table7 of the Dec2020 expansion scoping study noted a blended mass yield of 79% (83% on +19mm product, 67% on -19mm product). Something has provided them confidence to start modelling at blended recovery rates above that of the original scoping work. This is presumably from how DMS testing worked. The modelling used tends to imply that train1 and train2 DMS plants are planned. A first smaller one enables getting the 1.1mt ore processing operation stable. A 2nd bigger plant is then commissioned as part of the capacity upgrade. The blended grade output that balances volume, recovery and head grade (assuming no rounded figures) is 32.9%.

#7 For the 2025 year, the estimate is 3.9mt at a grade of 10.3% with a recovery of 83% for a volume of 1,007. At a final grade of 33.1% this would be 1,007.3kt and the summary notes 1,007. The end-state objective is therefore still a 3x expansion plan delivering a 33.1% grade.

#8 The 2024 figures imply that the future expected break-even price would be about US$3.78/t. Anything above that would be profit. If the Ore business is profitable at US$4.00/dmtu or above, that's very favourable especially relative so some recent comments active posting individuals that are non-holders. I thought we might have seen an cost estimate above $100/t.

• $0.98 is lost as shipping/grade discounts taking the price that would be reported as revenue to US$2.80/dmtu
• $92/t at a 2024 implied blended grade of 32.9% is $2.80/dmtu