Essentially the same tonnes and grade in total as Aug'23, which...

Essentially the same tonnes and grade in total as Aug'23, which is to be expected with only ~25% infill drilled. That said, personally a bit disappointed in the size and grade of HG 2.5% TREO cut-off Indicated zones and how much the deposit breaks up into different grade and mineralogical zones. Keeping in mind the ultra-deep E-W hole averaged 2.7% TREO, and this Indicated drill program targeted the HG areas, I think the market was expecting better early days.

Still should have a good few higher than avg early Stage 1 years before the strip and/or grade distribution forces the head grade down to a more sustainable mining avg. The 2.5% cut-off for 25Mt @ 3.26% TREO is a sighter for the Stage 1 grade avg imo, although again early years will probably start at 3.5%, later lower. Given relatively cheap gravity/water front end pre-concentration the deposit lends itself to economies of scale with larger crusher and more banks of shakers turning lower grades into large tonnes of same HG pre-con for the back-end plant. Basically, given more capex investment (which they can't afford tight now) the deposit can mine lower grades at similar low unit costs but much higher production levels should demand be there.

The cut-off, grade, tonnes curve shows that a 1.5% TREO cut at 2.58% TREO for 54MT is the natural large tonnage mining cut for low strip for almost 90% MRE to Reserve conversion... subject to capex and opex parameters. However, RE is not the copper market so off-take constraints prevent mining Kanga like a Cu-porphyry deposit maximising economy of scale. In short, I expect Stage 1 to start at ~3.5% TREO and quickly move to 3.25% then 3% over a potential 50 year mine life if Stage 2 never happens (just saying). This isn;t too far off broker expectations from early days, but there have been plenty of misses on the metallurgy front which is the bigger disappointment imo.


Updated my FS target table with Miss, Hit, Pass and there hasn;t been anything go better than hoped for yet. Global MRE was lower grade than early expectations, recovery issues with different rock types playing havoc with recoveries now well documented, if not qualified. It's a complication in addition to not reaching 80% recovery as originally hoped. Also the addition of what looks like a Sr-Ba-Carbonate and iron-oxide impurity separation plant added to the flowsheet(?) is a negative capex/opex that was another disappointment...


The critical variables in the FS are of course the capex and opex. My thesis for some time is both will blowout form expectations, thus the extreme share price fall, but especially capex from early company guidance of US$20M. Company keeps pushing the strong cash position etc, but reality is current cash is only enough to get them to FID and the last vendor payment due when production starts.... basically they complete the FS and look to enter FID with zero cash and ??? capex plus ~25% extra corp/loan/other funds required. I'm waiting on tender hooks for the capex and details of the FS, what capex the can push out into sustaining capex etc, to see what the equity requirement is looking like. Small changes in the MRE from early expectations are really small biscuits by comparison...

GLTAH