This presentation contains a lot of new information. Like always...

This presentation contains a lot of new information.

Like always I am here just to give my amateur view as a non mining professional for a bit of fun. This is not investment advice, Please let me know where I have made mistakes/incorrect assumptions. This is my take on the recent presentation. Lets discuss the Dolphin project. As you all know I am not a holder in G6M just someone that has been keeping a breast of the project for the last 5+ years with the expectation of investment but have yet to do so.

They have gone from a 14 yr mine plan to a 13 yr mine plan.

The two phases of Open Cut and Underground is now 3 phases

-Open Cut 1

-Underground

-Open Cut 2

I can not see any explanation as to why this change has occurred.I can have a guess (hbtwobs) as to why G6M is going with a 3 phase approach but perhaps one of the shareholders that have funds on the line can tell us why they think G6M have pivoted to 3 phases.

From a high level it seems a bit strange.

5.5 years to pay back the current spent Capex (phase 1 Open Cut).

6 years of Open Cut and then into Underground.

Underground Capex is all deferred and we know when it was first announced

OC was a capex of: $72.7m

UG(deferred) was a capex of: $56.5m

OC capex (I assume Phase one OC only now) ended up being more like +65m=$138m (90% higher)

UG capex if we use the same ratio for cost increases to the OC phase 1 would now be 56.5x1.9=$107m

I would imagine the lead time to get the UG into play would be at least a year. Which means by year 5 of Open cut phase 1 G6M will have needed to raise the Capex funds for the Underground.

Is the plan to raise funds in Open Cut year 4 to build the Underground whilst still having not paid for the original Open Cut phase one Capex?

What is the cost of Open Cut phase 2 post underground?

Looking at the 3 phases of mine output from the presentation

Phase 1 -192000MTU of WO3 contained in concentrate per year - years 1-6
Phase 2 -314000MTU of WO3 contained in concentrate per year - years 7-11

Phase 3 -295000MTU of WO3 contained in concentrate per year - years 12-13

The expected ASIC over the life of mine is $246 aud per MTU contained wo3. As above the first 6 years are the lowest output so it would be safe to assume it will have the highest costs. It would normally be fair to assume underground mining costs would be substantially more than open cut mining costs but G6M has somehow managed to keep Underground mining costs less than Open cut mining costs according to them in the ann “Updated Project Economics- More Robust Returns Forecast” on the 31 october (Page 5).

If the ASIC over the life of mine includes a lower underground cost per MTU than Open Cut costs you can expect the costs in the first phase of the Open Cut to be even higher again. Perhaps underground mining costs are well above open cut mining costs and G6M have already updated them which is why they now have an average of $246 aud per MTU. Or perhaps they still need to update them and the LOM average is well above the $246 aud per MTU. Share holders will not know unless G6M can confirm the expected Opex for Phase 1, Phase 2 and Phase 3. Not just a life of mine opex.

In good news slide 3 states the First concentrate shipment expected from the Dolphin mine. In not so good news Phase 1 open cut does not start its high grade(1.2%wo3) mining until 2nd half of 2024. This would imply that the first year and a bit will be processing much lower ore ~circa .6% which with all things being equal would mean the Opex for the first year will be considerably more than the following 2 years.

The project is currently sitting on $47.8m of debt. But the thing to be aware of is that there is $10m of debt due on the 8th of Nov 2024. (before the high grade ore kicks in).

Another thing of note is the 65% number used previously for confirmed off take contracts has dropped to 59% even though the MTUs stated has dropped from 240k mtu a year to 192k mtu a year. Another strange thing is the comment “At current tungsten pricing, offtake agreements represent approx. A$181 million over 4 years” when in the March preso it said: “At current tungsten pricing, offtake agreements represent approx. A$264 million over four years”.

It is good G6M management can still have a laugh with the title on slide 15:

Good luck to all holders. I am looking forward to the “Mine is online and we are producing Announcement”.