Ann: Trading Halt, page-157

Pre-Feasibility Highlights
▪ A Pre-Feasibility Study (PFS) prepared for the Poochera HalloysiteKaolin Project, South Australia has delivered further substantial
improvement in the project economics through the inclusion of onsite
wet-processing for the production of premium grade refined kaolin clay
to meet the large and growing global supply shortfall of high value
bright-white halloysite-kaolin for ceramic applications.
▪ An expanded Life of Mine (LOM) of 26 years based on the updated
December 2019 Mineral Resource5 enhances Project cashflows.
▪ LOM key financial metrics1
for the PFS comprise the following:
• All In Sustaining Cost2
(AISC) averages A$354/tonne of refined
premium halloysite-kaolin product with an anticipated selling
price3 of A$700/tonne;
• Project cashflow of A$1.97B pre-tax and A$1.39B after-tax;
• A 35% increase from the previous Scoping Study in pre-tax NPV8%
to A$736M and unchanged IRR of 175%;
• After-tax NPV8% of A$511M and IRR of 135%;
• Pre-production capital estimated at A$13M with a maximum cash
requirement of A$28M prior to initial revenues being received;
• Payback period of 15 months from commencement of mining,
through Direct Shipping Ore (DSO) mining, shipping and tollrefining activities;
• Onsite wet-processing plant and infrastructure, fully funded by
revenues received from DSO production, to be constructed in the
second year of operation at a cost of A$56M.
▪ Production Target4
is based on shallow open-cut mining of kaolinised
granite at 500ktpa which after processing and refining yields a LOM
5.9Mt of 15% halloysite premium product.
▪ Both initial bulk DSO material and subsequent site processed product
will be shipped through existing, or under development, port facilities.
▪ Estimated workforce of 30-40 people sourced mainly from local region.
▪ Marketing efforts expanded throughout Asia and Europe, with testing
for a range of applications underway with potential customers and
distributors.
▪ Commercial trial quantities of products currently being produced in
China and Japan for progressing customer offtake agreements.
▪ Focus now directed towards environmental impact assessments and Mining Lease application as part
of the Definitive Feasibility Study (DFS) with commencement of site activity targeted for early 2022.