Ann: Siviour Battery Anode Material Study Results, page-188

To provide context to the following post, the reference post is the one I did a little while ago on the previous feasibility intergrated studies - refer this Post #: 55990978

In this BAM, RNU have increased production capacity, which is a positive.

A bit more of a negative (from a market perspective I suspect) when comparing the results is that RNU are also assuming a slightly higher average PSG price to previous studies - averaging US$4,716 for first 10 years (where it is fundamental to IRR as well). IRR outcome of 26% is ok in this study, however down from the 33% in the previous study - refer embedded post above - for the intergrated operation.

Market acceptance of this BAM does boil down to the pricing assumption which I guess the market doesn't like (or doesn't understand) at this time, and that probably IMO explains the direction of the SP today. If the average price is say US$3500, then at a high level looking at a IRR of 19% here at a guess (i.e. simple calc 3500/4716 * 26%) which is less rosy. If the exchange rate, which looks like they used US$68c is higher, it also reduces IRR as well.

At a high level I redid the analysis in the embedded post above on this BAM, assuming 3 billion shares on issue - not a large increase on current SOI for funding etc etc. If BAM variables come in, the revised analysis is below, however there is a lot of uncertainty here given where the current PSG price is.

For me it is difficult to fathom why the PSG price is where it is today given the impending shortfall - refer Post #: 69169743- but would appear at this stage industry sees benefits of synthetic graphite over natural graphite (maybe in terms of lifespan and efficiency although Mitsubishi Chemicals is working out ways to close those gaps as posted by another poster a short while ago - refer Post #: 69174062-) which might relate to price and performance here, although synthetic graphite certainly isn't great on the ESG front. The forecasts in teh BAM on graphite prices make some sense (well the upward trend so not commenting on quantum of the change) given the impending graphite shortage, but the market is certainly hedging its bets and maybe teh market is saying until China's dominance is reduced in this area, and/or synsthetic graphite use is reduced, then prices may not do what one thinks they should do??? (Yes it is a question)



At the end of the day, SP here appears to have returned to a function of NPV by the looks it. That implies the market is yet to be convinced IMO that either i.) RNU will get to production or ii.) the market believes the PSG price will be higher than US$4000 per tonne. In production however one moves to nominal metrics at EPS and P/E ratios, but the question is getting to production, where you see SP growth really take off if parameters are met. For SP to grow IMO, RNU needs some binding offtake agreements and funding that convinces the market that it will get to production and/or alternatively for the PSG price to start moving upwards towards what RNU is saying and forecasting (i.,e. meaning the trend becomes your friend).

It is nice the BAM is out, however it would appear costs per tonne have increased and the IRR is been accommodated through higher prices than in the previous studies. I think that is why the market reacted as it did today.

If others have a differing view that is fine as well and please share.

All IMO IMO