Ann: June 2024 Quarterly Activities and Cashflow Report, page-57

In relation to the issue of mine life of Greenbushes I have done some further investigation

In early 2024 IGO released its updated Resources and Reserves Statement which can be found here…

https://www.igo.com.au/site/pdf/483721a4-afe7-4723-a907-6efce0c66748/Greenbushes-CY23-Resources-and-Reserves.pdf

What is not being communicated within the document is the relativity between past mine grades and future grades. I understand that @anatol has researched the performance and realised that the mine operation has effectively “high graded” the resource such that past performance may not be a good indicator of future performance in relation to grade and by implication, profitability.The remaining higher grade (>3% LiO2) resource may be largely consumed over a relatively short period of perhaps 7 or 8 years leaving lower grade, but still economically recoverable ore, which is unlikely to deliver the returns some expect from past performance.

The position can be observed in the following diagram drawn from the announcement above that is shown in page 8 and reproduced below (note legend shows colour coded grades).The Central Lode and Kapanga pit cross sections “2023 Reserve Pit Design” suggests that the high grade ore > 3% closer to surface in the central lode pit has largely been already mined in the existing pit, and has perhaps another 100m of vertical depth (around and below the approx 1130RL line in blue inserted by me) before average grades will reduce materially.I believe that this is the phenomenon referred to by @anatol in his remarks.

Further, the strip ratio applying to the extraction of the ore as the mine deepens to capture what is a roughly 40° dipping resource, will likely be higher.That will impact the ongoing economics negatively.The extent would be known by the company.Recent weakness in IGO price is probably not reflecting these issues but rather the overall chemical pricing and the outlook for its nickel business which looks seriously bad. I sold my IGO investment over 6 months ago.

For comparative purposes I have included another image of the Central Lode pits that was produced in a very detailed “Competent Person’s Report”(CPR) for Tianqi Lithium Corporation as at 2021 and published here in 2022…

It compares quite well in cross section to the image a) above and both are for the C3 pit ….

The complexityof the resource is shown, whereby ores of varying style and quality arepresent. The diagram adds to the implication that the high grade spodumene zonethat was present there to the 1200RL has now been mined down to about the1130RL as shown in image a) in the first illustration. I have inserted my ownline indicating the approximate 1130RL where the pit has progressed to up to2023 Resources and Reserves statement.

Greenbushes produces both Chemical Gradeand Technical Grade lithium products with the former used in battery chemicalproduction while the latter is used for glass and ceramics etc production. Thatdiffering product output reflects the varying nature of the ores and theirdeleterious elements. My understanding is that LTR will be producing 100%chemical grade SC6.

A directquote from the CPR on page IV-19 clearly shows the overall enormity of the resource,but also appears to confirm the reducing grade as the mine pit deepens (see mybold underlined)…

Despiteon-going mining, total Mineral Resources increased from 22Mt at a grade of 3.7%Li2 O in 2010 to 342Mt at 1.6% Li2 O at the end of August 2021 with extensionsto the Central Lode and discovery of a new resource at Kapanga….

OreReserves for Central Lode and Kapanga at August 31, 2021 were 169.6Mt at 2.0% Li2 O, with afurther Ore Reserve of 10.1Mt at 1.4% Li2 O contained within TSF1. In theperiod from September 1, 2021 to December 31, 2021 Talison processed 1.4Mt of ore at 2.4% Li2 O.

Summary…

Greenbushes started its life as a tin mine I believe and while itis clear that it is a cracking lithium mine with enormous resources, itappears that the highest grade ores are being depleted and that coststructures per tonne will be increasing based upon the lower gradeand increasing strip ratio as the pit deepens. This compares to Kathleen Valley where its mine plan, while also utilising high grade ore as early as possible, benefits from the lack of deleterious elements and uniformity of the ores being mined. We have a great lithium mine and KV benefits because of learnings from other older mines and our ESG credentials! All IMO.

Regards

DF