Ann: Term Sheet to Fund, Design and Build Lithium Facility, page-230

Point taken. However, the calc is not quite right. Plants require maintenance. Assume uptime of 85%, a 2,000 tpd plant will process about 620,000 tpa. Assuming the above to be approximately correct, I have the following questions:

1) Term sheet states Ardiden to define a 1 Mt resource at Seymour Lake. Ok that's great, but with the 'bigger hammer' process plant, this 1 Mt is processed in 19 months. Then what? Define more resource? Ok. Add another million tonnes and process this in a further 19 months. Rinse and repeat. No issue with this, but where has the boutique/moduline (modular!) strategy gone? We've moved to a 'proper' plant with a 'proper resource - getting towards the one I have been advocating. The 620 ktpa tpa processing plant is not big by any standard, but it's no longer boutique

2) I've read capex estimates of less than $10M by others (I think my memory serves me correctly) for the 2,000 tpd process plant (can anyone confirm this). For a 620 ktpa plant to produce 6% spodumene concentrate from a 1% feed, $10 M is fanciful - I don't believe anything under $50 M. AJM's process plant has a capacity of 1.54 Mtpa and capex is estimated at circa $105 M.

3) Why are Yantui willing participants? Because they are Chinese and spot a great deal a mile off. And by 'a great deal', I mean a great deal for the Chinese. With all due respect to Chinese, dealing with the Chinese invariably ends in tears - they are the masters at reaping what others sow. This is a great deal for Yantui. They provide 50% of capex as a loan to ADV (pretty hefty interest rate included), they get to supply the mechanical equipment from their own factory and they get to act as the middle man for some of the product. Where's the great deal for ADV?