Seems a lot of debate around start up costs, so I will give my...

Seems a lot of debate around start up costs, so I will give my take. Below is from this Ann: Post #: 45556512



The US$142 million that is been spoken on here is the intergrated operation, of which US$79 million is for the mine and concentrator based on past studies. Obviously these costs would have increased as well as graphite prices and noting recovery higher too, so would expect IMO IRR not to change that much here IMO. That is just a guess by me.

Point of my posts yesterday was to essentially say, I suspect they will move to exporting concentrate first and then PSG as one can be built quicker than the other, but suspect the funding access they have, with the $70 million just raised, covers Stage 1 somewhat. With delaying the PSG stage, can use profit to also fund an aspect of PSG as well.

However, with a JV for the PSG stage, probably can move to Stage 2 been implemented quicker. Depending on the BAM, suspect they will have access to the $185 million Commonwealth loan once FID is done. Just a guess IMO but happy for others to continue the debate but this is how I am seeing it. Maybe lets question the figures above and see what we think is the revised CAPEX for Stage 1 which includes PSG - around A$300 million now I think is a good start, and as I said I don't think IRR will change that much here because we got to remember prices are getting better (revenue account) and noting as well that recovery rate (which was 50% in the previous studies) has increased to beyond 60% based on 2022 METs.

Anyway, relooking at these numbers, binding offtakes and a JV will be very interesting here. Certainly would appear to me the $70 million is designed to cover cost overruns of Stage 1.

Reading the Commonwealth announcement, suspect the money will be available after FID because suspect the way they will do it is build concentrator and mine first and then the PSG stage, noting that would probably give them access to funding as can't build everything at once. Suspect that the PSG stage will come into production about up to 18 months after the concentrator stage, but with a JV suspect they could be positioned to both come in at the same time. It is a question of whether the BAM includes production greater than Stage 1, and if so this is where JV talk might come into being IMO for the PSG stage.

Anyway, just the back of the envelope VB calcs. If others have a view please share, but just some thoughts and I could be wrong as well.

Further valuation work here: Post #: 64051865

All IMO