Ann: Investor Presentation - May 2021, page-8

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Sidewinder888

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26/05/21

21:57

Post #: 53440937
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Originally posted by setfire2thehive: ↑

Agree,

Noting that this was done under a discount rate of 22% and spot pricing for spodumene which IMO was a little on the low-side to comparable current producers but nevertheless to have an independent evaluation delineate 3 almost 4 times upside at current there's obviously a lot more meat on that bone once finance is actually secured.

Also worth noting that the increased petalite recoveries which were achieved were not input into the original DFS.

Irrespective, very good upside and a few nice updates in the corp presentation. Certainly reads a lot better than the previous ones.

I was reading something interesting the other day and it was showing how resources/reserves increase over a project mine life. Essentially if you take our JORC resource total of 72mT and the reserves 37mT it was showing how often the resources fully convert to reserves once in production.

Simply put there's 35mT tonnes of resources which have not being converted to reserves. Sometimes this is just simply due to geological understanding. i.e. the 11.5mT indicated can't be inputted into a mineral reserve just because it's not defined enough. The other 24mT could be either due to lower grades, not inside the mining pit etc etc. I guess my point here is that there is another 25mT of resource and subsequently I believe additional upside to the resource should they have wished to defined further.

Why is this relevant? well a few people might note the 15y mine life which is based on 37mT. By simply converting the 12mT indicated to inferred you can potentially throw another 10mT on the reserves. Moving mine life out to 20Y. With more drilling and as this mine progresses i can easily see a case for 25Y. If you were to project an NPV/DFS with a slightly larger resource it does add some favourable economics noting that the DCF cashflow model means that revenues in the later year don't add much to the NPV figure. However in terms of real Post Tax earnings another 5-10Y of 100M AUD profits isn't something to be sniffed at.

Our staged production via optimised DFS will likely yield a few extra years on the mine life given the 1.2mtpa start-up but guess just wanted to make a point that often ore-bodies and resources aren't fully inputted into studies. If PSC was able to convert the whole 72mT resources to reserves you end up with close to a 30Y mine life. Not saying that will occur, but there's upside to it and something for people to read up on if the mine life was prevailing concerning.

SF2TH

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I was kind of hoping someone wouldnt mention that yet, pockets are almost full, might have to snap up the rest at opening tommorow as its pay day. I guess cat might be finally coming out of the bag. There is definitely some "hidden" up side on the current undervaluations as it stands in my calculations and opinion. But im leaving that for the long term cream and not including that in my projections. GLTAH! DYOR!

PSC Price at posting: 15.5¢ Sentiment: Buy Disclosure: Held
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Ann: Investor Presentation - May 2021, page-8

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Ann: Investor Presentation - May 2021, page-8

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