Ann: Exploration Update - Dalgaranga Gold Project, page-247

Apologies but the annual production figures in my previous post assume 100% recoveries.

Some more comments below. Speak up if you do not agree with my calculations and assumptions.

The production of 127k Oz pa gives a mine life based on the 765k Oz MRE in Jan 23 of 5.95 years and for the 200k Oz pa with 1.7m Oz MRE as at Dec 2023 of 8.5 years - SPR chose 5+ years and 8+ years mine life objective to put in their presentations (the annual production target set in early 2023 was between 130k Oz and 150k Oz - to achieve such a high level of production the grade would need to be significantly higher and to achieve a mine life of 5+ years the MRE would also need to be significantly higher than the 765k Oz they had a year ago)).

Based on this approach taken by SPR (which I do not agree with - see below for reasons) if they come up with an ET of 2.5mt or 3.25mt with a higher MRE grade of 2.7g/t and 3.0g/t (grade has been increasing with each MRE upgrade and I see no reason why it won't continue to do so) results in annual production of 217k Oz and 241k oz with a corresponding mine life of close to 13 and 15 years.

SPR's approach is very optimistic on both production and mine life as it does not allow for recoveries being less than 100% (the GCY days had recoveries 85% to 90% but may be higher if the SPR test work is realised ie may get to 90%). 90% recoveries would result in annual production of 195k Oz and 217k Oz for the same 13 and 15 years mine life. SPR's approach assumes that most of the MRE will end up as reserves which it won't.

Currently 66% of the 1.7mt MRE is classified as M&I and it will increase but not all of the M&I will end up as a reserve. If we take 75% or 60% of the ET ending up as a reserve then the mine life will be about 9.5 years and 11.25 years at 75% and 7.7 years and 9 years at 60%. 75% is probably too high but I expect the M&I proportion to go up towards 80% if not higher (they have an objective for NN of 85%).

By comparison BGL has only about 55% of its MRE classified as M&I and 43% classified as a reserve. However, they have a mine life objective of 10 years with average annual production of 185k Oz pa which exceeds both the M&I and reserve, with the reserve being only 72% of planned production over 10 years.

Each deposit is different so it seems SL is banking on being about to have a much higher proportion of the MRE as a reserve than BGL. If he achieves such a result and achieves an MRE between 2.5mt and 3.25mt in the next 12-18 months then maybe an annual production of 200k Oz pa for a mine life of over 10 years is achievable.

I also note that the BGL deposit seems much more complex than Dalangara especially NN which is much simpler - will that result in SPR being able to extract a greater proportion of the gold at NN and Dalangara?