Ann: Core Definitive Feasibility Study Presentation, page-39

The Good:

• Even with all the extra costs, poor expected sales prices and no Carlton - this thing still makes a profit.
• The payback period from shipment of first concentrate is 17 months and freecash flows of A$158 million.
• IRR of 80% is still great, but not the 142% of the PFS.
• EIS being in the final states of assessment is great - let's hope it all goes smoothly.
• Glad to see the Far West Belt included in the Finniss Pyramid. If Hang Gong pans proves to be economical, i'll eat my hat if the Far West Belt isn't also.
• Plenty more reserves to add, so this is the worst case (unless the FX rate, or Lithium price change).

The Bad:

• Financing is still very troubling to me - I'm not overly excited about debt funding as that will reduce the NPV further with interest payments. Ruifu - something smells with that deal and I would be very surprised to see it materialise. ***This is still the biggest risk for this company.
• I'm a little concerned about how they referenced the Lees-Booths resource. It didn't fill me with confidence that the MRE is going to add up to much. "Core is currently undertaking a modest MRE for Lees, however, further drilling in the greater Lees area has the capacity to deliver a large deposit of stacked pegmatites with shallow dips" That wording is setting low expectations IMO, i'm also not sure why they are separating Lees, Booths and Lees-Booths link out from each other.
• Further on page 47 they say "Five pegmatites drill tested to date have moved on to become JORC resources, soon to be joined by Lees". No mention of the Lees-Booths link or Booths...
• The strip amount is still a killer for such small deposits. Sandras and Carlton won't yield anywhere near as much profit as Grants & BP33 unless that Carlton's offshoot gets a lot bigger and isn't only at depth.
• They are happy with 5.5% concentrate and are not bothering with 6% - IMO this will limit our ability to find substantial off-take partners.

The Ugly:

• Management misled the market. There was no chance of a DFS in December, but they sugar coated it with Carlton's being added to the DFS. There is no Carlton's in this DFS, and so we all got diluted for not good reason. Sure sounds a lot like "working capital" to me.
• Significant increase in costs. The net result being that we had resources increase by well over 100%, yet the NPV goes down (PFS: $140m to DFS: $114m).
• It's worse when you consider the exchange rate (PFS 0.75, DFS 0.70) (NPV of $91m if we use the PFS FX rate).

Final thoughts:
Assuming approvals and financing get sorted (even if it's debt funding) this company is worth >15c per share.

Having said that, I expect the SP to finish lower again tomorrow as many punters (myself included) expected this DFS to build on the attractive figures in the PFS. Instead it's been a fairly sombre read, and doesn't even provide me short term hope of a big MRE announcement for Lees-Booths. The main positive is that it does provide greater clarity on the potential financials for this operation and associated long term share price/MCap expectations.