How much ore and waste rock do you think is still to be mined...

How much ore and waste rock do you think is still to be mined out of Grants and at what cost?

Grants alone could potentially generate over $200m of net cash flow at current prices, so you think BP33 and all the other assets of Core are worth zero?

As at June 2023 Core had an ore resource of 40.8kt Li₂O with an open pit proven and probable ore reserve of 28.8kt Li₂0. The open pit mining plan had 12.0kt that was not recovered via the open pit mining plan (some was to be recovered by UG mining). The 11 April 2024 Resource upgrade showed the ore resource was now 33.6kt Li₂O. While not 100% definitive, 21.6kt Li₂O would appear to still be recovered via the Grants open pit plan.

If 21.6kt of Li₂O were to be recovered in the form of 1.4% ROM ore, it would be approximately 1,540kt of ore.
If 21.6kt of Li₂O were concentrated to a 4.8% concentrate with a 63% recovery it would be 283kt of SC4.8

While some spot auctions indicate prices nearer US$1,300/t places like SMM quote SC6 at US$1,135/t. With grade and a probable contract/concentration discount this is likely to be about US$820/t-US$860/t for SC4.8. Using US$850/t this is around A$1,300/t at current exchange rates. Grants has perhaps A$368m of revenue from it remaining through the completion of the open pit mine at current prices and Dec23 month recovery rates.

Core has informally advised that 10.8M bcm of 12.2M bcm of waste rock has been removed. This means 1.4M bcm is still to be moved. The spodumene ore adds another 0.56M bcm. Say this costs a rather expensive A$18/t to shift, Core has $35.3m of mining costs to incur before receiving this A$368m of revenue. We don't know the new processing cost structure, but last year GL1 put out a scoping cost for a DMS+flotation plant. The processing cost they assumed was A$299.2/t for DMS+Flotation. If Core were to only replicate GL1's assumed costs with their new less contractor based cost structure the 283kt of SC4.8 would have a cost of A$84.6m for its DMS only operation. I'll assume there's also A$100/t for general admin and to port logistics (Core is close to port) and the logistic element of shipping costs (The price above is CIF not FOB). This adds another A$28.3m of costs.

$368-$35.3-$84.6-$28.3 = A$219.8m from Grants alone. Existing losses mean there should be little to no tax on this. There will be some royalties payable. This calculation isn't remotely close to break-even but I can't figure out where its materially wrong.

Clearly GM stuffed up because Lucas didn't appear to have the ROM pad to put a further 1.5Mt onto over the next 3-4 mths (Lucas could mine nearly 2M bcm in a quarter). Logistically SB/GM stuffed up because the deepest part of Grants pit mining was falling at the peak of the wet season. Contract wise SB/SL (both now over at WR1) stuffed up because the contracts didn't work and needed breaking/early termination. Design wise, SB stuffed up in scrimping on the ore test work. Communications wise GM, SB & SL all stuffed up because they didn't clearly outline to the market how costs would change over time and that early Grants costs would look terrible. These factors are however captured in the calculations above and impact why the share price is where it is. Operationally blaming price is easier than acknowledging these multiple stuff-up's, but has done far more damage to the share price than noting and accepting and owning these stuff-up's would have done.

IMO Core is no longer overvalued and is into the under-valued territory. Might it get more under-valued? Yep that's a possibility. Might clarity emerge that there could be A$200m of cash flow generated by completing the mine-out of Grants? Possibly, but I'm not really expecting that until the June accounts are finalised. In another stuff-up, you do big write-down's at year end not mid-year.