Ann: Massive & Disseminated Ni-Cu Sulphides Intersected, page-43

Hi @McHenry
As with most exploration results….it depends. Firstly, in the context of this very early stage of exploration and the implications for the remainder of the Money Intrusion to host potentially economic magmatic Ni sulfides then yes imo I see this is a major step forward. Remains to be seen what the actual grade is, but yes anything in that 4-6% range is right up there. The massive sulfide zones at Nova run 4-6% Ni, but overall resource runs at ~2.4%. The analogy that DRE are using in Jinchuan, which is again high tenor but more a disseminated to net textured style and runs around 1.2% Ni.

In terms of widths, depths, and extents….again, its a single hole at this point, so all of that remains to bee seen. But at face value, assuming its high-tenor then even the 12m of disseminated has the potential to be ~>1% nickel, and its shallow....but, clearly needs follow up holes and the DHEM to get a sense of possible scale….but it’s a very positive start.
Then if you start getting into the nitty gritty, obviously need assays for confirmation of grade and to determine any PGE content. Will also need to test to confirm that whatever sulfide nickel being reported is all pentlandite and not nickel substituting into pyrrhotite (can happen)…but that’s all for another day.

I'm not concerned with the project interest at this point. As I see it FQM are still in the earn-in phase to 51% by spending $12M by March 2026….which means they can walk away at any point and it reverts 100% back to DRE (I don't see that happening after today).
But it would be interesting to know what the current spend has been, and how far off they are from reaching that trigger. I suspect that they still have a way to go, as there has only been heritage clearance, ~1,800m of RC drilling, assays, FLEM survey, and no doubt some background technical work (petrology etc)….so even with this program I don’t think they will be close. Which means they can walk away at any point and it reverts 100% back to DRE.
Now clearly the results from today has the potential to change that rapidly, and I wouldn’t be surprised to see them up the spend to reach the initial interest (51%) and formation of a joint venture.From there, FQM can increase its interest to 70% by sole funding expenditure up until a Decision to Mine, so essentially DRE is 30% interest free-carried up to decision to mine….
IF (and that’s a big if) we ever get to that point, then we have those different options to maintain, dilute or divest. The point for me in that regard is that if FQM elect to advance….then that will be because they see it as satisfying their global Ni-Cu-PGE project metrics…which would mean DRE is potentially also holding 20-30% of a significant asset.

But staying in the moment...lets see how the follow up holes go.