Ann: Quarterly Activities and Cashflow Report 31 December 2022, page-83

Unless I've missed it, no-one has commented that A$3.3m was reported as Production operating costs. Presumably this is the cost of producing the Ore for DMS stockpiles and the DSO shipment that will soon be A$20m of cash. Now that's a nice profit margin!!.

On the negative, the cumulative PP&E and other non-current asset expenditure is getting above the totals I'd expected. If there is a $10's of millions capital overrun, its a couple of cents negative to the share price. The big boy's will have known this as they unpacked the quarterly. With Core having raised $100m, this won't cascade to a capital raise but it may have been a problem if Core hadn't raised the extra $100m.

The table below is the combination of the last six quarterlies. Up until the September quarter, costs were still under the known budget of A$95m, but not by much ($95m = $89m + $6m extra for DMS acceleration). This quarter had $51.5m of Capex including $41m of other non-current assets - Mine Development. This takes the known Mine development to $54.7m and if the other non-current asset expenditure was also mine development, the cost of this component is now out at $75m. This is slightly over double the quoted $33.9m for Grants pre-strip.

Interestingly Core has decided not to front-foot this in the quarterly and explain what's happening, particularly since the pre-strip appeared to be complete very early in the December quarter:

• Is there just a massive cost blow-out and the extra charges were agreed in the December quarter, hopefully to be forgotten or forgiven when the spod shipments start?
• Have some expensive costs towards BP33 been incurred?
• Is this starting to capture the $10.3m of FY23 expenditure in the DFS for processing and other infrastructure?
• Has Core implemented some other project like connecting the remaining 8km to the grid? (and if so, why not announce it?)
• Is a useful amount of capital expenditure being spent to recover lithium from fines (or prepare for DSO sales)?

The August 2021 estimated cost was A$89m. The A$100m capital raise noted A$6m extra for DMS project acceleration taking the total to A$95m.