General Discussion Banter GLN, page-9144

Thanks for posting this spovend, I was digging this out to make the same point but you have beaten me to it. My recollection back in the early days was one of the reasons the focus shifted West rather than Candelas was HMW was likely to provide more area not only for higher grade and more resource ( life of mine) but also more area for pondage , which yes is a key constraint in any function determining maximum annual output..

Now if someone was arguing that room for ponds will act as a constraint to increasing the annual production rate at some point in the future when there is a known greater resource size that may, all other things being equal will have permitted an increase, that is definitely true, but that number is far bigger than 20,000 Tonne per year, the current pfs number.

For mine this is also why beyond some point , I don't know the precise number, increasing the resource size will have little further impact on valuation. If today's announcement comes in at say 4 MT I think we will be converging on that number where continued resource drilling to add to total M&I wont move the valuation number much more but rather other parameters then will drive it much more, like time to production, offtakes etc etc. More drilling will be important but the focus then is really moving from inferred resource status to M&I, and from M&I to reserves to de-risk the project.

So yes room for pondage is a key constraint at some point because without a dle form of technology , X wells flowing at X litres per second will require ever more area for pondage if you want to ramp up annual production. Having more resource at some point is academic if you cant harness that resource into more cashflow per year and its annual cashflows per year which really moves the needle in an npv analysis.

Where that level actually sits I don't know and my educated guess is somewhere beyond 4 MT of resource and 30-35,000 Tonnes of production per year at HMW. Way higher than what has been discussed in the pfs and the entire rationale really of the dfs they are working on is to find how that equation is optimized so we can maximize the annual production given the resource size and these other key constraints like flow rates and area for pondage . To suggest we are already at those constraints with a 20 K number is just incorrect based on what has been represented to the market.