Ann: Core and Tesla execute Binding Term Sheet for Lithium supply, page-238

IMO expansion via additional DMS capacity is no-brainer at present. The only factors delaying it are:

• Identifying enough resource so that a sensible life of mine is maintained with the additional capacity.
• Having confirmation that the existing plant design works as planned.
• Financing it (which IMO is not a restriction at present with the access to finance Core now has).

Agressively an expansion decision is made soon so that additional capacity is available for a good portion of 2023. Processing even 100kt of ore through an additional plant with a 71.7% recovery and grade above 1.21% would yield 15kt of Spod. 15kt of spod at say a US$3,000 margin (probable 2023 pricing) would pay back the cost of the plant. Basically the expansion is free-carry within months of implementation. Even if it was then only used sporadically its worth doing earlier rather than later. Having an installed processing capacity of 350-400kt would mean Core could take advantage of any spike in Spod prices to ramp up delivery and sell more during periods of high pricing (such as today's pricing). It would also provide a contigency if breakages occur.

The only wild-card is whether a different processing methodology of DMS+Float or fully floation is now optimal. This could improve the recovery rate and therefore be optimal as a 2nd plant. 1.1Mt production using 1.4% ore is 190kt of 5.8% spod (at a 71.7% recovery). If that could be boosted to 80% through a more capital expensive expansion plant, that throughput from the same starting volume of ore could be increased to 212kt of spod. An extra 22kt of Spod/yr at say a future sale price of US$1,500 is US$33m/yr of revenue. Low capex DMS made sense at spod prices under $1,000 and its still a good option. It would however make sense to explore options that could increase recovery rates before committing to the expansion.

IMO the most likely scenario for Barrow Creek is expansion #3 taking Core up past 500ktpa. If plant is usefully and profitably used at Finniss, keep it there. Given the distance away, concentration to Spod is most effectively done at Barrow Creek itself. Given timelines from rock chips to production, nothing is going to be produced out of Barrow Creek in the next five years, but to get production in the later part of this decade requires actions soon.

Also: "Potential low capex production expansion of Production at Finniss" from capital raise slides is a 2nd A$40m DMS plant. This had a 2022-2024 timeline.

Fines
At a spod price of around $800, processing fines made compelling economic sense. Spod price increases won't have changed that, so the economics will have improved. IMO its an A$8.4m project that will happen and quickly, but may not go through all the usual phases. Lets assume the fines indicative pricing of US$80/t was determined by taking 10% of the 6% spod prices the time (which was then about US$800). Spod prices are now around US$4,000/t indicating fines could now be US$400/t. That would be US$44m/yr of revenue. I think this project will be brought forward from FY2024 with the A$8.4m of capex committed mid to late 2022.