Ann: APPOINTMENT OF FLOTATION SCOPING STUDY PARTNER, page-16

Part of the gap is caused by the LLL figure being calculated in 2021 meaning it doesn't have any of the last two years of high inflation captured within it. From inflation alone across the last two years, another 10 or 15% needs to be added to LLL's AISC/C1.

A second factor is back when LLL's C1/ASIC costs were calculated their pit envelope was $666/t. That means if there was ore that cost $800/t to get out of the ground, process, truck to port and sell, the plan was to leave this ore in the ground and not mine it. Thats fantastic at keeping C1/ASIC low as it means any ore costing more than $666/t as a total cost isn't mined. Its a terrible business strategy in a high sale price environment because lots of mineable ore is left behind. As noted in an earlier post, LLL are now using a pit envelope of up to $1,500/t. You still make good money if you extract ore up to this price and sell it at $2,000 to $3,000+ per ton. From a higher pit envelope design price you have a larger resource to work with in developing any new life of mine calculation. The downside is that C1/AISC increases. The most recent LLL slide deck noted a planned August Reserve upgrade. This should also update C1/ASIC and I'm confident they will increase (sorry). The unknown factor is by how much. If a lot of the new ore is cheap to mine the C1 increase won't be much. If a lot of the ore brought into the mining plan is relatively expensive to mine (deep/lower grade) then there could be quite a big increase in these two metrics. Spod price expectations now are higher than back when the DFS is done so it should be higher costs, higher revenue and probably higher NPV etc (a bit like Atlantic did).

And the relevance to Atlantic
Atlantic took the hit around having a higher C1/ASIC cost as part of its DFS. The strip ratio was increased from 1:8 to 1:12 so that more ore would be planned for extraction, processed and therefore sold. Atlantic could have kept volumes lower, kept the strip ratio at 1:8 and avoided at least some of the C1/ASIC increase but that wasn't the most sensible course of action to maximise shareholder profits. Ultimately the share price will be determined by the profits made which is broadly the margin difference between ASIC and selling prices not the absolute value of ASIC/C1.