Ann: Dome North Resource upgrade, page-91

Well for one, Allkem owns Mt Cattlin not Mt Marion.

Just going back to the MRE upgrade announcement, I thought Tim Spencer was very clear in the presentation he gave at the beginning of December on a few points, including the MRE update.

He flagged that they were about to take on an additional executive which they now have, with the signing on of the ex-Core bloke to help market their product. That also fits in with what TS also said at the presentation, that they have gone out to the market seeking off-takers who are willing to help with the financing of the project, with offers to be in by the end of this year, with a binding agreement to be announced by April next year.

TS also flagged in the presentation the MRE update was coming, and now it has. This upgrade was always about moving resources from inferred to indicated and he has said previously that if they get at least 7.5 mt of indicated then they "are off to the races". What they have now is enough to develop a mine that will run for 6 or 7 years. From there they will look to add additional resources from the various prospects they have identified on their existing tenements.

With regards who the offtake partner could be he has explicitly referred to north Asian players, China, Korea and Japan, and added that he and the team will be looking not only at the financial aspects of any offer but also how reliable a partner will be through the full commodity cycle. To me that is code that they are disinclined to match up with the Chinese as during the last lithium downturn ending in 2020 some of the Chinese did what the Chinese are prone to do and walked away from contracts, leaving their Australian partners in the lurch.

As for shipping unprocessed ore straight to downstream processors as a way of shortening the time to revenue TS said in the presentation that maybe they might do that for 3,000 tonnes or so just for some early liquidity. The impression TS gave is that they want to be a proper full scale producer, not only of their current resources but of a pipeline of resources they expect.

I agree with others that Boss McGowan and TS do not seem to be hustling the project along. However, rather than leaving a bunch of profits on the table by selling lots of their resource as unprocessed ore maybe when they get their offtake partner on deck in April that partner will incentivise TS to fast track things along. The offtaker obviously would prefer they start getting the product in 2024, not 2025 and maybe they are willing to pay a premium for that.

Unlike a few of the other critical mineral stocks I follow coming into the end of the year TS has got ESS fairly much where he said they would be by now (other than the dusters).