CXO - has a 7.4Mt Reserve not Resource One has be careful not to...

CXO - has a 7.4Mt Reserve not Resource

One has be careful not to use the Terms Reserve and Resource interchangeably- They are completely different in terms of reporting the level of confidence and economics of mining with regard to the strict guidelines of the JORC reporting.

Here are some definitions via the 2012 JORC guidelines - The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.



A ‘Mineral Resource’ is a concentration or occurrence of solid material of economic interest in
or on the Earth’s crust in such form, grade (or quality), and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity
and other geological characteristics of a Mineral Resource are known, estimated or interpreted
from specific geological evidence and knowledge, including sampling. Mineral Resources are
sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured
categories.

An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade
(or quality) are estimated on the basis of limited geological evidence and sampling. Geological
evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is
based on exploration, sampling and testing information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill holes.
An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated
Mineral Resource and must not be converted to an Ore Reserve. It is reasonably expected that the
majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with
continued exploration.

An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or
quality), densities, shape and physical characteristics are estimated with sufficient confidence
to allow the application of Modifying Factors in sufficient detail to support mine planning and
evaluation of the economic viability of the deposit.
Geological evidence is derived from adequately detailed and reliable exploration, sampling and
testing gathered through appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes, and is sufficient to assume geological and grade (or quality) continuity
between points of observation where data and samples are gathered.
An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured
Mineral Resource and may only be converted to a Probable Ore Reserve.

A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or
quality), densities, shape, and physical characteristics are estimated with confidence sufficient to
allow the application of Modifying Factors to support detailed mine planning and final evaluation
of the economic viability of the deposit.
Geological evidence is derived from detailed and reliable exploration, sampling and testing
gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes, and is sufficient to confirm geological and grade (or quality) continuity between
points of observation where data and samples are gathered.

A Measured Mineral Resource has a higher level of confidence than that applying to either an
Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proved Ore
Reserve or under certain circumstances to a Probable Ore Reserve


An ‘Ore Reserve’ is the economically mineable part of a Measured and/or Indicated Mineral
Resource. It includes diluting materials and allowances for losses, which may occur when the
material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as
appropriate that include application of Modifying Factors. Such studies demonstrate that, at the
time of reporting, extraction could reasonably be justified.
The reference point at which Reserves are defined, usually the point where the ore is delivered
to the processing plant, must be stated. It is important that, in all situations where the reference
point is different, such as for a saleable product, a clarifying statement is included to ensure that
the reader is fully informed as to what is being reported.

A ‘Probable Ore Reserve’ is the economically mineable part of an Indicated, and in some
circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying
to a Probable Ore Reserve is lower than that applying to a Proved Ore Reserve.

A ‘Proved Ore Reserve’ is the economically mineable part of a Measured Mineral Resource. A
Proved Ore Reserve implies a high degree of confidence in the Modifying Factors.


An Exploration Target is a statement or estimate of the exploration potential of a mineral deposit
in a defined geological setting where the statement or estimate, quoted as a range of tonnes
and a range of grade (or quality), relates to mineralisation for which there has been insufficient
exploration to estimate a Mineral Resource.


While we are at it with definitions - lets have a look where ESS may be going with Studies

A Scoping Study is an order of magnitude technical and economic study of the potential viability
of Mineral Resources. It includes appropriate assessments of realistically assumed Modifying
Factors together with any other relevant operational factors that are necessary to demonstrate at
the time of reporting that progress to a Pre-Feasibility Study can be reasonably justified.

A Preliminary Feasibility Study (Pre-Feasibility Study) is a comprehensive study of a range of
options for the technical and economic viability of a mineral project that has advanced to a stage
where a preferred mining method, in the case of underground mining, or the pit configuration, in
the case of an open pit, is established and an effective method of mineral processing is determined.
It includes a financial analysis based on reasonable assumptions on the Modifying Factors and
the evaluation of any other relevant factors which are sufficient for a Competent Person, acting
reasonably, to determine if all or part of the Mineral Resources may be converted to an Ore
Reserve at the time of reporting. A Pre-Feasibility Study is at a lower confidence level than a
Feasibility Study.

A Feasibility Study is a comprehensive technical and economic study of the selected development
option for a mineral project that includes appropriately detailed assessments of applicable
Modifying Factors together with any other relevant operational factors and detailed financial
analysis that are necessary to demonstrate at the time of reporting that extraction is reasonably
justified (economically mineable). The results of the study may reasonably serve as the basis for a
final decision by a proponent or financial institution to proceed with, or finance, the development
of the project. The confidence level of the study will be higher than that of a Pre-Feasibility Study.

Terms such as “Bankable Feasibility Study” and “Definitive Feasibility Study” are noted as being
equivalent to a Feasibility Study as defined in this Clause.


OK Clear as mud everyone? haha
So lets revisit ESS

Here is our Dome North Resource Classified as Indicated and Inferred.
Recent drilling may have added to our 11.2Mt Resource and/or moved some of the inferred category to indicated

To move to a Measured category we just need to drill at closer spacings for that increase in confidence level defined in the JORC guidelines



Excellent metallurgical characteristics

• Scoping Study level metallurgical test work showed a total lithium oxide (Li2O) recovery rate of 74% was achieved using a hybrid Dense Medium Separation (DMS) + flotation flowsheet to produce a 5.6% lithia (Li2O) concentrate with 0.7% iron (Fe2O3) content

• Excellent potential for improvement with further refinements.


Lets now look at CXO Resource

CXO Reserve


CXO Exploration Target




After all that, CXO is a valid comparison to ESS and to where we could be in a couple years or so
Lots of work still needs to be done, Drilling, Studies and possibly the odd offtake, with a few CR thrown in for good measure.


Have a great weekend everyone
Keep your eye on the prize!