Ann: Termination of offtake - Great White PRM, page-23

I posted the following comment in September 2021, which was the last time I posted here as a holder - Post #:56133133
here:

"I am sure others will disagree and have a viewpoint, but I can't get away from the fact the 2020 PFS had a pre tax IRR of 175%. A PFS is plus or minus 25% - 35% whereas a DFS is plus or minus 10%. You would have had to screw up the PFS enormously for the DFS not to come in with a pre tax IRR of at least 70% - 100%. I think they just need to get this to production and then worry about their expansion scenarios and what other products they intend to produce under Stage 2 and Stage 3, but that is a personal view. Obviously, it is always difficult to be an explorer seeking to transition to been a miner, so always difficult to understand what is happening in the background and who is doing what, but from my viewpoint it would appear too me JM is doing the bulk of the heavy lifting here. Obviously I could be wrong."

In no uncertain terms, the 36% IRR derived from the April 2022 DFS revision was obviously not what the market expected and the SP response thereafter clearly showed that the market thought that ADN does not have a handle on the project. I personally do not believe such a reaction would have been there if the initial PFS back in 2019/20 had a IRR of 40% and then the revised DFS came in at 36%.

My point is simply this - if you had a project with a IRR of 175% you would be in production today - basically you would move heaven and earth to get it into production given an IRR of that scale means the project is viable. Clearly in retrospect ADN did not have a handle on the project.

Today's announcement also clearly shows they have little to no confidence over the 36% IRR in the revised April 2022 DFS.

Trust in ADN has been completely shot again by this announcement, and I didn't think it could get any lower. My learning from ADN is free carry strategies are a key this side of the market, so thank God I did that at the time, but also when you have studies with high IRRs and you don't see the movement to mining that you would expect, you need to get out. I personally waited too long to get completely out. Where the SP is today, this is no longer relevant whether you hold oor sell, but when the SP was a lot higher taking profit or getting out in the absence of seeing what you would expect is a key)

All IMO