ASX ANNOUNCEMENT 12 October 2015 INDEPENDENT REVIEW SUPPORTS...

ASX ANNOUNCEMENT​

12 October 2015

INDEPENDENT REVIEW SUPPORTS NEAR
TERM PRODUCTION AT MT CATTLIN
 Average annual spodumene production of ~111,500 tonnes
per annum over an initial life of mine (“LOM”) of 17 years
 Average annual spodumene production of ~133,500 tonnes
per annum over first 10 years of production
 Near term cash flow at low $14.7m restart capital cost
 LOM Revenue: $1,164m
 LOM net cash flow: $526m
 Net cash flow 2017-2019: $119.9m
 Base case: NPV $247.5m (8% Discount Rate), IRR 230%
 Robust financials support intention to restart production at
Mt Cattlin by end of March 2016​

General Mining

Table 1.1 - Financial Assumptions:
Item Description Value
Spodumene (6% Li2 O) US $/t $445.00
Tantalite US $/lb $75.00
Exchange Rate AUD/USD 0.75
Penalties Payable % Spodumene Variability 5.0%
Penalties Payable % Marketing 5.0%
Penalties Payable % State Royalty 5.0%​

NPV Discount Rate % 8%

Table 1.2 - Summary Outputs:1
Item Description Value
Life of mine 17 years
Peak Metallurgical Recoveries
(start 2017 onwards)
Spodumene 75%
Tantalite 70%
Ore Mined 12.04Mt
Throughput Rate 800kt pa
Spodumene Produced 1,894,420t
Average Annual Spodumene
Production ~111,500t
Tantalite Produced 85,924t
Total Revenue $1,164,464,000
Total Operating Costs $575,795,000
Total Operating Costs Per Tonne $47.82
Recommencement and
Optimisation Capital $14,722,119
Indicative Finance USD $10m offtake loan $13,333,333
LOM Sustaining Capital $34,244,548​

LOM Net Cash Flow $526,215,000

Table 1.3 – NPV Sensitivity Analysis (NPV in A$m)
Spodumene Price
USD/t
FX Rate (AUD/USD)
0.700 0.725 0.750
$445 $289 $268 $247
$470 $316 $294 $273
$500 $348 $325 $303
Please see Appendix A for a comparison between the assumptions used above and those used to define the Mt Cattlin​

Reserve as per the Company’s 4/8/2015 announcement.

Hope this helps