Hi Gopher, always good to hear from you. The MTU concentrate...

Hi Gopher, always good to hear from you. The MTU concentrate price EQR receives(The JV as a whole) is around $16.7k AUD per tonne based on previously announced data from EQR (Ann 16th Sept 22 - page 3). Currently it's probably closer to 180 AUD per MTU of concentrate. But a slightly conservative figure would be $160AUD of revenue for every MTU of concentrate sold.

Matters get a bit more complicated as for every MTU of tungsten in the ground you need to take into account the losses along the process flow.

If we assume:

-it all gets x-ray sorted and we keep 90% of the tungsten post sorting, we lose 10% due to sorting

-Plant extracts 80% so we lose another 20%

-and then convert it to 50% concentrate

You can take 100,000 MTUs of pure tungsten in the ground and apply the above.

100,000 x .9 x.8=72,000 MTUs of pure tungsten kept

72,000/.5=144,000 MTUs of 50% concentrate.

So a reasonable guess would be for every 100,000 of MTU added in the next pit upgrade it is likely to generate additional revenue of: 144,000MTUs concentrate*$160=$23m AUD.

Based on the previous pit resource upgrade that added 261,000 MTUs of tungsten it would be $23m x 2.61 or about $60m AUD in increased revenue.

If the next update adds in ground tungsten MTUs of:

100k -> +$23m AUD revenue

200k -> +$46m AUD revenue

500k -> +$115m AUD revenue

If you apply these numbers to Iron Dukes resource of 5.8mt @.59% for 34220t contained

34220t/0.01=3,422,000 MTUs.

$23m *34.2=$786.6m AUD

We have already had new drill hits at Iron Duke so we know the number above is just the start.

Regarding the next pit upgrade we know there is 2 million tonnes of dirt that is included in the current pit shell as waste as it is yet to be drilled out. This is out of a total of 14m tonnes of ore/waste that is in the current pit design. I am not sure if this 2m tonnes has been drilled out in the latest campaign, I expect it has but maybe not. We also expect the new pit shell to extend to the west. So there may be two parts. The upgrade to current contained ore and the addition of the new area added to the pit. The beauty of the 2m tonnes is that it’s already being dug up as waste so any new resources from here should lower opex and an already impressive low strip ratio should get lower. The resource that is added outside of the current pit shell may increase opex and the strip ratio. It will be interesting to see how these two figures change after the update. What we do know is that with either or both the NPV and IRR will improve!

We should be due a few announcements in the next few(4) weeks.

-drill results (3 holes reported on the 13th of Feb, 4 holes reported on the 27th of Feb, there were 23 holes planned, so 16 hole results to come)

-draw down of the last $5m AUD from the regal royalty transaction scheduled for post environmental permitting which occurred on the 6th of March.

-updated resource off of the latest drill campaign

-updated BFS off of the back of update resources.
-March quarter results late april.

1,3,4 may all come at the same time but that would not be the norm for EQR so something may be very soon.

Bring on the BFS update!