AGM, page-3

Just running through the PEP from Sept 2020.

The price assumptions they had for cobalt at $59,000 a tonne, 45% above current prices around the $33,000 area. Nickel currently about 25% under their assumptions, so based on the below, they are missing about $250mio USD per annum in pre-tax revenue or 30% of all revenue assumptions, meaning the IRR likely in the high single digits now. Would like to know what the plan is to plug the gap and if investors are baulking based on this.

For scandium to plug that gap they would need to sell ~ 150 tonnes. Although a standalone $25mio scandium plant likely has a great ROI if producing 20 tonnes per annum. (see below workings).

1		PEP	Sep-20
2			PEP price forcasts	Current	% lower than forecast
3		Cobalt price assumption	$59,200.00	$33,000.00	-44%
4		Nickel Assumption	$24,200.00	$18,000.00	-26%
5
6
7		Tonnage per annum	Revenue at PEP forecast (before tax)	Revenue at current pricing	Difference
8	Nickel	21,293.00	$515,290,600.00	$383,274,000.00	-$132,016,600.00
9	Cobalt	4,366.00	$258,467,200.00	$144,078,000.00	-$114,389,200.00
10		Total	$773,757,800.00	$527,352,000.00	-$246,405,800.00
11
12		Scandium stanalone production
13	Scandium	20,000.00	$30,000,000.00
14
15	Scandium in kg required to fill gap	164,270.53
16	Tonnes required	164.27

So really need a recovery in pricing for Nickel and Cobalt, but currently both Nickel and Cobalt heading into significant surplus thanks to Indonesian and DRC ramp ups, China is stockpiling, so is Glencore in cobalt, but still ~ 20,000 tonnes surplus forecast next year for cobalt. Most forecasts arent for a return to deficit until 2027/2028, therefore unlikely any significant price recovery. That being said, by 2030, without new supply coming on-line, it is highly likely that Sunrise will be required for its nickel, cobalt and scandium as well as PGE.

Would have thought some heavy incentives via govt grants required to get us off the ground before 2025 based on the above, would be good to get an insight on what govt grants they are looking at