Ann: FY22 Q4 Quarterly Activities Report, page-22

I hear you Heeman.

I've now had a chance to listen to the briefing.

I calculate the Ganfeng tolling cost to be approx US$16k/t which, with tolling margin for Ganfeng, would be consistent with the slide below from PLS a few months ago which suggests a conversion cost of about US$5k plus say US$7k to the converter.

Given the calibre of Ganfeng to produce the highest purity battery grade and direct market to their customers like Tesla this could well be a fair fee for their specialist services in order to realise top market pricing for battery grade qualified product and the US$77k average.

Excuse my back of envelope calcs below.

Mt Marion

222kt SC for 2H FY22

222kt / 6 months = 37ktpm
37ktpm / 5 months = 185kt
185kt * 0.51 = 94.35kt for conversion (Feb to June)
94.35kt / 6,722t = 14t SC per tonne of LiOH (which is very high compared to 7t PLS and others have mentioned for SC6 but we don't know conversion losses due to other impurities of lower sub 6% grade)

MIN LiOH revenues US$510m
MIN sells 95.35kt at US$2,645/t = US$252m cost to deduct from conversion sale price (done to calc WA royalties and Aus tax)
MIN LiOH EBITDA = $150m

SC + EBITDA = US$402m

US$510m - US$402m = US$108m to Ganfeng which = US$16k/t.

If the LiOH is outside China there would be Chinese VAT that would reduce Ganfeng margin.

Also the SC export price is based upon the average of 4 lithium indexes, so as the indexes rise this quarter towards PLS average above $US4k and LiOH stays at $70k, then Ganfeng margins could compress.

Based upon my recall of commentary over several years by numerous lithium luminaries, US$16k would be somewhere in the realm of what Ganfeng might have assumed as a long term LiOH selling price in economic analysis used to justify building new China based conversion capacity.

Regarding total revenue MIN will pocket US$150m PLUS Spodumene concentrate sales into LiOH processing which = US$2, 645 less 5% WA royalty of US$132.25/t = US$2,512/t

US$2,512 less US$430 cost of production = US$2,082

US$2,082 x 95.35kt = US$198m

US$150m + US$198m = US$348m

US$348m = Aus$498m

Handy cash to offset the iron ore anchor MIN is dragging until Ashburton is operational.

Mt Marion plus full year of Wodgina output to LiOH will be impressive if lithium prices hold.

Cheers

EV