Ann: Black Rock Signs Conditional Framework Agreement with Urbix, page-17

This is a big announcement for a number of reasons:

1. Urbix is a great partner. Opening up US and Europe to go with POSCO and our Asian customers is creating good diversification in end user.
2. Urbix dealt with samples from 35 graphite partners and chose us as a leading partner. They say our flake is perfect for EV market. This is a big tick
3. ESG credentials of the project improving.
4. Adding train 2 straight up is a big positive for a bunch of reasons.
5. Circling back to yesterday's discussion I have been told inflation to CAPEX could be as much as 40% so more than I factored. Which is why the above becomes really important



6. If we add stage 1 + 2 capex and inflate 40% we get US$260m. Let's assume 50% debt. That drops us to US$130m needed. As mentioned we have $35m deferred EPCM and $20m prepay. Drops us to US$75m needed. Urbix might provide $20-30m??? If so we need say US$50m. We probably have US$15m in cash/early works. Leaves US$35m. Therefore we might need to raise A$60m. This is more chunky than originally thought but can still be value accretive.
7. If we assume that we raise A$60m at 20c (let's be ambitious) then we add 300m SOI. Let's round a little and call it 1.4bn SOI all said and done.
8. At 20c that gives us a MC of A$280m.
9. Now we will be producing c. 165kt p.a. Basket price is $1,300 but could be about to squeeze higher. Allowing some opex inflation of 25% costs might be c. $650 to be conservative. So margin is $650/t
10. That gives us 165kt x $650 x 0.84(post gov free carry) / 0.7 (fx) = A$129m.
11. So we would be trading at around 2.2x FCF on a 26 year LOM. That leaves plenty of upside from my 20c theorized price.

There is a lot happening but this news is definitely positive.