Megafauna, After Dougal's presentation in March, I sent him an...

Megafauna, After Dougal's presentation in March, I sent him an email asking for clarification of what he meant by pro-rata and this is the reply I got:

Thank youfor your email.

The NALplant is currently operating and is expected to ramp to targeted annualproduction capacity of 226,000 tonnes per annum over the next 6 months.

During thisramp phase, each shipment will be split approximately 50/50 between the Piedmontofftake agreement and Other customers.

Post theramp phase (2024 and beyond) each shipment will be allocated pro-ratabased on Piedmonts entitlement to the 113,000 tonnes per calendar year, withthe balance of each shipment going to Other customers.

Forreference, the ownership of the NAL JV (Sayona 75% and Piedmont 25%) refersonly to the ownership interests of the NAL JV, and not the share of productwhich is allocated between the customers of the joint venture

Regards

Dougal

and a follow up email from Dougal:

Postramp-up, each shipment will be shared between the Piedmont offtake and Othercustomers, with the Piedmont offtake concentrate allocation applied on apro-rata basis of the 113,000 tonnes over the calendar year. The balance ofeach shipment will be allocated to Other customers.

Thank youfor your support of Sayona.

Regards

Dougal

From his two emails it is clear that during ramp-up phase the shipments will be split 50/50 between JV Customer/s and PLL, and post ramp up EACH shipment will be shared by JV Customers and PLL. What is not clear from Dougal's emails is the ratio of sharing of EACH shipment in the post ramp-up phase. Dougal assumes in his emails that SYAQ will produce to its nameplate capacity and PLL will be entitled to no more than 113,000t at $900/t. Of course, this assumes SC6 production and if the grade is less than SC6, PLL entitlement @$900/t will be adjusted upwards.