Ann: Significant pegmatite system intercepted at Andover South, page-381

IMO. DYOR. If there is something missing or something wrong, let me know.

1. Resource and Reserve Assessment

Grade of Resource:

• Average Grade:
  • Lithium assays range from 0.11% to 2.1% Li₂O. Notable high-grade intervals include:
    • 2.1% Li₂O over 0.4m (90.56-90.96m, ASDD010).
    • 1.42% Li₂O over 2.8m (9-12.8m, ASDD007).
    • 1.29% Li₂O over 1.19m (12.81-14m, ASDD006).
  • Weighted averages indicate moderate grades; most intersections are between 0.5%–1% Li₂O.
  • Compared to benchmarks, a high-grade lithium resource typically averages ≥1.5% Li₂O over significant widths, suggesting the need for more drilling to delineate zones with higher economic potential.
• High-Grade Zones:
  • Notable high-grade pockets indicate potential for economic advantages, but the sporadic distribution requires more extensive mapping and exploration.

Resource Size and Classification:

• Total Resources:
  • Currently undefined. 12 drilled holes have intersected pegmatites with variable thicknesses:
    • Up to 15.3m thick (ASDD006).
  • In Target Area 7, a significant 57m thick pegmatite zone was intersected (ASDD023), suggesting larger-scale potential.
• Resource Classification:
  • Presently inferred and exploratory. No classification into Measured, Indicated, or Proven categories under JORC guidelines.

Reserves and Mine Life:

• Proven and Probable Reserves:
  • None defined yet.
• Mine Life:
  • Indeterminate; dependent on delineating economic resources.
• Expansion Potential:
  • High potential through further drilling in untested zones, particularly in deeper structural targets.

Limitations and Inconsistencies:

• Resource reliance on inferred data limits confidence.
• Downhole widths are reported but true thicknesses and orientations remain undefined due to the preliminary nature of structural analyses.

2. Feasibility and Costs

Feasibility Study:

• Status:
  • No PFS or Feasibility Study completed yet. Exploration remains in early stages.

Capital Expenditure(CapEx):

• Pre-Production CapEx:
  • Not estimated; significant future costs expected for drilling, resource definition, and infrastructure development.

Operating Costs(OpEx):

• Cost Metrics:
  • Absent in the report.
  • Given moderate grades, cost competitiveness depends on favourable infrastructure and processing conditions.

Breakeven Price:

• Commodity Sensitivity:
  • Breakeven price not calculated but depends on achieving consistent grades ≥1.5% Li₂O and favourable market conditions.

Limitations and Inconsistencies:

• No detailed breakdown of cost estimates.
• Early exploration means limited understanding of economic feasibility.

3. Revenue and Profitability

Financial Metrics:

• NPV, IRR, and payback period not calculated yet.

Assumptions:

• Economic assumptions (e.g., lithium price, exchange rates) absent.
• The current lithium market remains strong, driven by EV demand (~$40/kg Li₂O).

Hedging Strategies:

• No strategies outlined to mitigate price volatility.

Limitations and Inconsistencies:

• Financial models depend heavily on optimistic assumptions regarding grade, resource size, and market trends.

4. Timeline and Milestones

Development Schedule:

• Key milestones include:
  • Assaying results for Target Area 7 due within 3-4 weeks.
  • Ongoing drilling in Target Areas 1, 2, and 7, focusing on strike extensions.
  • Structural modelling of Target Area 7 to guide future exploration.

Past Performance:

• Timelines for current milestones have been met without significant delays, except for mechanical issues that halted drilling at 558m in ASDD023.

Limitations and Inconsistencies:

• Potential delays due to assay backlogs, permitting, or funding challenges.

5. Geological and Technical Risks

Geological Models:

• Early data suggests stacked pegmatite systems, with mineralization hosted in ultramafic and **bro rocks.
• High-grade zones remain poorly understood; additional structural measurements are required.

Mining Method:

• Likely open-pit mining for shallow zones; underground methods may be required for deeper deposits.

Metallurgical Challenges:

• No metallurgical test results. Risks include:
  • Refractory ore or contaminants affecting recovery rates.
  • Unknown processing costs.

Limitations and Inconsistencies:

• Limited recovery rate data and metallurgical test results.

6. Infrastructure and Logistics

Proximity to Infrastructure:

• Located in the Pilbara region, near mining-friendly infrastructure:
  • Existing roads and ports available for transport.

Development Requirements:

• Infrastructure for water, power, and ore processing will require significant investment.

Limitations and Inconsistencies:

• Remote location could increase costs.

7. Environmental, Social, and Governance (ESG) Factors

Permitting and Compliance:

• Tenements are secure with no known impediments.

Community Engagement:

• No details on agreements with local communities or consultation efforts.

Environmental Impact:

• Mitigation strategies not outlined.

Limitations and Inconsistencies:

• ESG commitments need development to avoid future risks.

8. Management and Team

Experience:

• Team has experience in exploration but limited operational accomplishments.

Track Record:

• Unclear track record of delivering similar projects to production.

Limitations and Inconsistencies:

• Potential gaps in expertise for scaling projects.

9. Financing and Ownership

Funding Status:

• Not fully funded for future phases, reliance on external financing.

Ownership and Partnerships:

• Raiden holds 80% ownership in key tenements: no joint ventures.

Limitations and Inconsistencies:

• Uncertainty in securing sufficient funding.

10. Market and Economic Context

Commodity Market:

• Lithium prices remain favourable, driven by demand for EVs and batteries.

Supply-Demand Dynamics:

• Positive near-term outlook but long-term risks from potential oversupply.

Geopolitical Risks:

• Low regulatory risks due to stable jurisdiction in Western Australia.

Limitations and Inconsistencies:

• Long-term market forecasts are uncertain.

11. Competitive Position

Benchmarking:

• Competitive with early-stage lithium projects but lagging behind more advanced operations.

Competitive Strategy:

• Focus on high-grade zones could improve competitiveness.

Limitations and Inconsistencies:

• Limited cost advantages identified.

12. Exit Strategy

Path to Monetization:

• No clear strategy yet; potential for joint ventures or outright sale.

Long-Term Vision:

• Resource expansion and improving grade remain priorities.

Limitations and Inconsistencies:

• Monetization plans underdeveloped.

Conclusion

This project exhibits significant exploration potential but remains highly speculative. The presence of high-grade zones offers promise, yet economic viability hinges on further resource definition and cost modelling.