Ann: Restart Study Repositions Finniss Operations, page-315

Underground mining can be cheaper / more efficient than an open pit when considering ways to mine part of specific ore bodies. If UG weren't, the only UG mines (across any minerals) would be where its impossible to create an open pit. There are UG mines across multiple minerals in locations were open pits are possible so there must be times when UG is cheaper than open pit as a way of mining ore.

If you have a large deposit with a low strip ratio then open pit will be cheaper than UG. Many of the spodumene deposits being found involve steeply sloping if not near vertical pegmatites that frequently go beyond the depths where open pit makes sense. LTR is leading the charge around UG mining of spodumene, but the advice from Mr Brown and team around how to mine the remainder of Grants indicates this should have been Core leading the UG mining charge. The problem was getting support for an UG mine for spodumene would be difficult, particularly if that mine wasn't world-class scale as LTR is.

Fundamentally its down to strip ratios. If they are high in an open pit scenario, UG may come out cheaper. I suspect Mr Brown has significant experience in exploring / reviewing plans around UG mining so he knows what he's doing far more than AI prompts. The September 2023 JORC updates from MinRes included 31Mt of UG resource at Wodgina and 9.5Mt of resource at Mt Marion that was UG. The planning for that most likely started under Mr Brown.

If the strip ratio is over 20, there's a really good chance that UG could be more cost effective than open pit. For example, if mining costs were $5/t for open pit, a 20:1 mining ratio is going to be paying $105/t in mining costs to recover the ore to the ROM pad. The truck that pulls the load of ore out of the ground may only be $5/t, but the other 20 trucks carrying away waste to enable this one ore carrying truck cost collectively cost $100. Some of this may be called pre-strip capex. Some of it may be called sustaining capex, but its all cost that needs to be incurred and may take total costs higher than the C1 prices quoted for open pit. Its that $100 of other costs that is avoided by UG and substituted with a whole new set of costs/issues that exist for UG mining.

In Core's 14 May 2025 update, the UG mining costs were stated at $63-72/t to recover the ore. Even at a 15:1 strip ratio Core's probably going to have UG come out cheaper than open pit mining and that's before considering in a Finniss mine context getting an open pit down to even 200m is difficult.

A second factor is the way Grants was being mined via open pit there was massive dilution. Non-lithium bearing pegmatite/host rock was being intermingled with the lithium bearing pegmatite lowering the grade being recovered from the pit. The greater precision of what ore is recovered from UG operations means Core would have a cleaner and higher-grade product put on the ROM pad. This beneficial effect doesn't show in strip ratio calculations, but it should come through as a higher/cleaner ROM grade and from that, higher recoveries / less iron issues to manage.

Overall many mining operations are exploring or implementing UG mining plans. Within Australia they include Kathleen Valley, Greenbushes, Wogdina, Mt Marion, Mt Cattlin, Finniss (via Grants and BP33), Finniss (via LPM's Lei), Pioneer Dome & Manna. Overseas operations are also looking at UG include the Shaakichiuwaanaan project by Patriot in Canada.