feas confirms its a goer, page-79

just received a brief eMail from Michael. I asked him about the BFS update that was announced for February in the latest quarterly, start of the infill drilling, expressed my surprise about the (new? - as of 18/02/08, see below) plan to produce Lithium Carbonate from Spodumene and asked for an explanation of the decline in shareprice that puts us below crash level at the end of January08.

He "overread" my question re Lithium Carbonate production and started to explain that market conditions are generally bad in Australia these days and the downmove was on very low volume. The infill drilling is about to kick-off soon and they have opted to finish the mine design and economic assesment first before starting the drill programme.

There will be probably an BFS update out this week and last but not least he told me that State One has almost finished a brokers report on GXY that might be released this week as well.

Most important for me was the fact that no bad news (deterioation) has hit GXY over the last weeks and that management is keenly working on the project. I personally value State One amongst Australia's top research brokers and appreciate their continious support for GXY.

I would be interested in your thoughts regarding the proposed Lithium Carbonate production.

from NR as of 18/2/2008:

...In addition the Company intends to expand the scope of the Mt Cattlin Bankable Feasibility Study (BFS) beyond the production of spodumene and tantalum concentrates to include production of lithium carbonate (the key feedstock for lithium battery production) either at Ravensthorpe or in JV with an offshore partner...


To my understanding such production is not viable - at least not in Australia and China is going to develop some huge Lithium brine projects in the near future which are highly competitive in terms of production costs.

Cheers

Lenni