Ann: Quarterly Activities and Cash Flow Report, page-28

Yes, you have applied it correctly. However a couple of caveats with the arena number you are quoting comparing to Galan ;

Obviously the more you have ( the bigger the thing your selling) , like anything in life , the more scope there is for a genuine buyer to press you for down for a "volume" discount. Galan selling ( or being bought out) on a 6.5 Mt resource is a different ballgame then someone selling something on paper for about 1/10th the size. That's just the power of cash. Real estate is a good example, if I am buying a hectare off you I have more scope to squeeze you down on price then if buying a quarter of an acre. There is a bit of that going on in that Arena number for mine as they weren't buying a lot of proved up resource but equally LAC could clearly see the potential for their resource number at Pastos Grandes Basin, Salta to grow enormously hence why they paid a big number relative to the small level of resource.

It also dovetails perfectly with LAC's own tenements on that Salar. Again a Pastoral analogy is good here, your farm is always worth more to your neighbor than anybody else ( because of economies of scale, consolidation benefits etc), so there is also a big element of that also in LAC's price. LAC unquestionably wanted the dominant position on that salar and happy to pay a big premium on Arena's known resource to get it which they could do because the known resource itself was quite small, but LAC I am sure would know the probability of actually maybe doubling or tripling the resource is probably pretty high.

Final point to note too is LAC paid by way of share script. So it has cost them nothing in terms of cash but more shares. When your paying in this manner you will pay more than a cash buyer also.

My earlier calculation giving a figure in takeover situation of circa $1 - 1.20 BN is probably conservative when you look at M&A acquisitions last year such as Neo Lithium. Daniel Jimenez was citing a metric last year that projects were selling for circa $ 40,000 USD - $ 45,000 per estimated 1kt of annual production. He was citing that number before prices peaked around $85 K LCE, but even with the recent price retreat in LCE, I am pretty confident that number as an even better valuation metric still holds.

So if Galan comes in at 25,000 Ton per annum production , which it should ( up from 20 ktpa in the Pfs, though honestly with the much increased reserve we have now from our recent resource update, and good well pumping results and flow rates, they might even be able to demonstrate 30 Ktpa is feasible, especially considering HMW has a fairly large geographic area to locate both wells and ponds on, but lets not get out over our skis just yet on that annual production number ) , so on this metric that would equate to 25,000 x 40,000-45000 USD = $ 1.0 - $ 1.125 BN USD or $ 1.40 - $ 1.60 BN Aussie. To me this is a very realistic number.

In a way this rule of thumb Jimenez was citing is more conservative because to use it you have to be able to estimate an annual production rate you have done a fair bit of work on either through a pfs or more likely a dfs and there is also a clear expectation you will obtain both mining/extraction rights and all other appovals such an environmental etc. Gln is getting very close to being in that situation.

I remain very convinced the market has fundamentally got its valuation of Galan wrong valuing it as of this afternoon at $ 350 odd Million. To be fair there is uncertainty in the market over this lithium chloride approach but hopefully a lot of this uncertainty will be soon resolved by the upcoming DFS.