Ann: Appointment of GM - Marketing & Strategy, page-27

Investing-trading is a strange business, where the inertia of previous actions often over-rides judgement of the day. I looked into ESS for a friend and bought some above 40c support during the 15c oppie churn, based on inherent value of the 11Mt @ 1.2% LiO2 MRE, notwithstanding that lithium prices will be much. much lower cum production.

Then I thought twice after considering the poor exploration results since beginning of 2022 and how that damage has probably not been properly reflected in the share price given the 2022 lithium boom overshadowing all else. Unfortunately, all upside beneath and surrounding Cade and Davey peg's has been killed over multiple drilling programmes, which is unlucky. One might have expected more depth extension before the spod fractioned out, if not more peg's around these two.

Having read over 2022 releases, "resource extension drilling" has become "the new MRE won't grow form 11.2Mt, but it will lift in confidence level". Early quotes for a 1.6Mtpa plant to put into scoping study has reduced to 1.2Mtpa, maybe a bit smaller. Been working around the Pioneer dome for some time, so although the number of structural peg targets looks impressive, they are based mostly on geophysics and interp which history shows are generally long shots. Ground truthing has found some Lepidolite bearing pegs, not spodumene which you want, although that can change with further exploration.

So I was telling another friend to hold off buying after the price broke down to 39c on the basis that with a disappointing MRE update all but locked in and in a deflating lithium market the price was likely to stay under pressure and head for 32c support. When the scoping study comes out and whether that changes the trend I'm not sure. Meanwhile, just got a thanks for the tip to hold off buying, while wincing at the red on my holding portfolio for not taking my own advice and stopping quickly out under 40c.

On my numbers the 11.2Mt makes has a good NPV at anything around the lowest price predictions and much better at higher spod conc prices obviously. I like the strategic location and value of the project, which should help with dreaded funding that usually cruels developers with falling share price and spiralling dilution heading into the DFS and then FID. I don;t like buying too early into the Lassonde Curve feasibility death spiral but am attracted to 'value' lie flies to a shifty blanket. History has taught me the difference between value and value-trap is subtle in substance but can be brutal in reality... Hoping 32c holds and management quickly get PFS out and JV/offtake partners in for funding certainty quickly over 2023 while lithium prices are holding up.

GLTAH