Ann: GSR: Mt Thirsty Cobalt-Nickel Operational Update, page-6

Hi,

This is a good update from GSR which appears to have been pretty well received by investors, although obviously, there are still a number of major hurdles to be overcome.

Neverthless, Mt. Thirsty now looks like it is finally heading in the right direction (after over 2 years of almost total inactivity ).

Unfortunately in London today on the LME, the nickel spot price has taken a dive and is off 16% for the day so far (it is currently 12:10 pm here in London). The nickel spot price is therefore trading at ca. US$26,500 a tonne. This is of course a whole lot lower than the figure that GSR used in their "Mt Thirsty Cobalt-Nickel Operational Update" today i.e. US$37,115 a tonne.

Fortunately, GSR were smart enough to include a table in today's announcement which shows how sensitive the profitability/NPV of Mt. Thirsty is to the nickel spot price, as well as to the price of Cobalt (see "Table 1").

As you can see from today's announcement, from the previously presented PFS (in February 2020), and according to GSR, the pre-tax NPV (at the spot price that GSR used in their announcement today i.e. US$37,115 a tonne), has now risen significantly from A$44m to A$712m.

Having said this, using the actual nickel spot price on the LME (at 12:10 London time) which is currently US$26,500 a tonne, the actual pre-tax NPV of Mt. Thirsty is probably now only about A$500 million i.e. it has fallen by around A$200 million. Ouch!

Like all holders, I am optimistic that CNJ and the adjacent licence holders can agree on a ownership structure that will allow the development of Mt. Thirsty to proceed far more quickly, and for the benefit of all long-suffering shareholders.

GLTAH!