Ann: Restart Study Repositions Finniss Operations, page-335

A huge amount will depend on the debt/equity mix that Morgan Stanley recommend and whether Morgan Stanley are able to arrange an offtake deal with the ability to be contracting more than 1Mt of spodumene supply to secure that deal. Assuming that spod has an expected sale price of >US$1,000/t (on average), payments of over US$1 billion will be made by an offtake partner to Core. This scale of prospective future payments means some sort of pre-payment in the order of 10-15% of the contract isn't prohibitively large.

But this does raise another point that has had little discussion - What sort of pre-screening would Morgan Stanley have done before taking on the assignment of being associated with Core Lithium as corporate capital raising advisors?

• None?
• A little bit?
• Quite a lot?

I suspect that Morgan Stanley did quite a lot of pre-work before accepting the assignment of raising capital for Core and agreeing to be named as the partly seeking to find a capital solution for them. Morgan Stanley could easily have made Core sign a NDA so they became a non-named corporate advisor. This would have been the commercially safe option for Morgan Stanley if they had any doubt about their ability to deliver an acceptable solution. If Morgan Stanley don't find a solution and Core follows the path you suggest, headline's like "Morgan Stanley fail to save Core Lithium" will potentially be in every major financial paper in Australia and probably some, if not many abroad. Will Morgan Stanley let that happen, its very unlikely.

So what we have is an American Bank of similar size to Goldman Sucks (SIC). Both have the ability to move the price of Australian lithium companies by the research notes they issue, doing extensive DD on Core lithium and then presumably pitching Core to various OEM's and other offtake partners. Both have extensive links to corporate clients with extremely deep pockets. You view is that Morgan Stanley will fail completely in their task. I think that is unlikely.



So this was the mandate noted by Core:


Also, there are fairly obvious ways of reducing the pre-start capital envelope so that it is smaller than the current MC of Core. The easiest option is to start BP33 first. BP33 is of sufficient size that it can supply the proposed annual volumes and run for years. Once its up and running Core can use that cash flow from BP33 for further exploration of projects like Blackbeard and also to get Grants UG mine operational. If Grants was done second and many years away, the pre-start capital ask drops from $200m to $135-$150m. Still a big sum, but one that is now lower than Core's MC.