Assays for surface outcrop, page-80

Mr F

I doubt WSA are very interested in lithium. They could perhaps be encouraged if they had size and grade however I am not convinced they do given where they are located relative to Kidman, Poseidon and Lithium Australia.

They have one mill at Forrestania Cosmic Boy design throughout was 450ktpa so a small circuit. They have applied a bio-leach circuit to increase throughout and recovery and I understand they are operating at close to 600ktpa rates.

So to answer your question no they have no spare capacity. Their grade is 4% nickel Poseidons grade is closer to 1.5% nickel. That is way WSA are still operating even though they are only just covering costs on a C3 basis and why PoS, Panoramic and Mincor are on C&M and looking for other opportunities such as gold and lithium 2 metals that are attracting investors at the moment.

WSA are focussed on developing Cosmos Deeps. I am not convinced that will happen as most nickel projects need plus $7US/lb-Ni to pay back the capital and I am not convinced we are going to see nickel start with a 7 in front of it for a while yet?

Would WSA buy Kidman I doubt it but would others buy Kidman you can guarantee Kidman will be a take over target. As soon as KDR announce their maiden resource if it has the size and grade we think it has they will immediately become a take over target.

The real play in the short term is between KDR and POS. If an agreement is struck for the use of the Lake Johnston process plant they could be producing by the end of next year ahead of Pilbara Minerals.

KDR will have little project risk compared to Pilbara as they will have the typical project risks such as design and construction. KDR will be looking to use the existing plant and infrastructure at POS to trial mining and processing at Lake Johnston before they start continuous mining and well ahead of continuous processing effectively using the POS process plant as a pilot plant. See their presentation below.

http://clients2.weblink.com.au/news/pdf_1\01791692.pdf