Ann: Widgie Nickel Quarterly Activities Report & Appendix 5B, page-9

The plan with Armstrong pit after dewatering is to cut a portal and tunnel down to the nickel orebody beneath the pit. It is a completely different scenario from starting a pit at the Faraday litium deposit.

I have a two issues with the company's Lithium strategy:

1) There are numerous mentions of Direct Shipping Ore (DSO) in company announcements but i am yet to see any evidence that the Faraday grades are high enough to put on a ship and send to China without milling and concentrating. DSO is common for some commodities such as iron ore , however, it is rare in the case of lithium. Due to lithium shortages Chinese downstream processors have over the past 6 months been willing to pay asx listed Core Lithium US$950 per tonne for spodumene ore grading 1.4 percent lithium. The Faraday nickel resource is 481,000 tonnes at 0.59 percent lithium which includes a high grade core of 106,000 tonnes at 0.87 percent lithium. The "high grade core" at 0.87 percent is well short of 1.4 percent. I hope Mr Norregaard can prove me wrong and secure the Chinese customer/s for Faraday DSO grading at 0.87 percent. Getting them to inject capital would be great as well.
2) There have been several mentions of metallurgical testing in recent announcements. Indeed it is reported that initial testing has produced a saleable concentrate. It is therefore reasonable to conclude that the company is looking at more than just mining and exporting direct shipping ore, i.e., they are considering a processing plant for lower grade ore. I wouldn't normally have a problem with this except it flies in the face of the main reason I invested in Widgie Nickel in the first place - a low capex entry to production by trucking nickel ore to Kambalda for toll treatment at BHP's processing plant.

I am all for the company advancing the Faraday project if there are genuine near term customers for dso grading 0.87 percent but nor at the expense in any way of advancing the mining of Armstrong and the numerous other nickel ore bodies.