Hello team-ARL, I'm sorry that my post last night was long and a...

Hello team-ARL, I'm sorry that my post last night was long and a bit technical. Thanks Red for sending it to Matt and hopefully ARL will clarify. From their perspective they may see no problem until it is pointed out that Table 1-1 could easily be misunderstood by shareholders and brokers. I have rad this morning that many are still worried about this matter, so I'm going to have another go at explaining it. I've broken it down, and once again apologise for its length, but hopefully its easier to follow.

1. Miners such as ARL quote concetrations of metals in terms of the metal in ppm or %. (For example, the cobalt concentration in ARL's deposits is about 0.1% cobalt metal.) The miner will quote how much nickel and cobalt it sells in terms of lbs (pounds) of nickel metal or cobalt metal.

2. ARL will process its metal concentrates to make metal sulfates (for the EV/battery industry). The final product is quoted in terms of the purity and the metal sulfate concentration in pounds (lbs) of metal sulfate. For example, a company will quote how many lbs of nickel sulfate or lbs of cobalt sulfate it produces and sells.

3. ARL is going to be a miner as well as a processor. It describes its mine production in terms of lbs of metal in the ore and quotes in $US per lb (pound) of metal. ARL is also going to process the ore and produce high purity (99.9% from memorry) products of nickel sulfate and cobalt sulfate. ARL has quoted the C1 costs of producing metal sulfates in terms of metal content (not metal sulfate content, as I think it should have).

We can see this more clearly by looking at page 21. Here we see in Table 8-1 where ARL states the C1 cost of production (mining and processing) in terms of nickel metal and cobalt metal. These values in Table 1-1 are transferred to Table 1-1 . The key quote in the PFS about the C1 cost is found on page 21 (just above Table 8-1):
"the PFS assessed the C1 cash operating cost for nickel metal equivalent."

4. How can this terminology be important? During the leaching process with sulfuric acid, the cobalt metal is disolved from the ore and combined with the sulfate (from the sulfuric acid). Each molecule of nickel sulfate that is produced is more massive than the original nickel metal. Table 1-1 shows that nickel sulfate is 4.5 times more massive than nickel metal. While cobalt sulfate is 5 time more massive than cobalt metal. (These numbers can be checked by using the periodic table to calculate the molecular weight of these metal sulfates). In effect, the processor of the the metals converts it from lb metal to lb cobalt sulfate and, in doing so, increases the mass (or weight) by 4.5 times for nickel (and 5 times for cobalt). Remember that the extra mass or weight comes from the addition of the sulfate to the metal.

5. So Table 1-1 is misleading to many of us because it uses $US per lb of metal for the cost of the mining/processing operation, and $US per lb of metal sulfate for the price of the sale of product to EV industry. It may sound like voodoo chemistry/economics, but basically, for every lb of raw metal that is in the ore, ARL will produce 4.5 times the amount of nickel sulfate and 5 times the amount of cobalt sulfate.

6. These ratios are critical to understanding Table 1-1. In fact, I don't understand why two different units should be used in Table 1-1. From the perspective of the shareholder and broker, we see C1 is just a few $US less than price. Then we become worried and concerned (panic maybe). But in fact C1 is quoted in different units to price. It would be better if they had converted lb metal to lb metal sulfate for this important Table. Having said that, the figures in Table 1-1 and throughout the PFS are correct. They are understandable from the perspective of the people who prepared it because, their calculations have taken into account the different ways a miner and a processor will quote C1 cost and price. However, they have not been consistent when they use two different units in Table 1.1 and left the explanation to much later in the document. And that explanation is too brief for the layman.

In the end, the figures in the PFS are "outstanding" (even if they are presented in a way that may be misleading). ARL will be a very profitable comany. Good luck to all.