Ann: Significant value upgrade following updated PFS - Arcadia, page-24

What's evident in this updated PFS is the company is looking at mining & shipping more tonnes of spodumene in the earlier years of LOM than that anticipated in the previous PFS. Makes sense to take advantage of the current strong spodumene pricing.

However, the downside is the effect it has on mining costs - 12.5% increase in tonnes of waste rock that needs to be removed, translates to an average cost increase of $5 pt Conc.

The obvious question is how much of average cost is borne at the front-end to enable the company to access the higher grade (and value) spodumene. This will obviously negatively affect profitability in the first few years of LOM, and potentially cancel out any benefit of the current strong spodumene pricing.

The PFS suggests the increase in mining costs will be partially offset by a reduction in labour costs.. i am skeptical of this.

Lastly, changing freight pricing from CFR to FOB to reduce OPEX by $32 pt Conc. is misleading as this will also be offset by lower pricing/revenue per tonne of Concentrate.