Nickel Boner Update, page-1855

Hi K,
I'm not going to provide my estimated AISC hurdle for the POS Board to commit to a FID because it will probably be wrong. We know that this Board has taken a more conservative approach to that which was touted by the previous BOD, headed by CI. Probably quite justified in the fullness of time, imo, given there wasn't very much fat in the 2018 DFS and that the NP (in AUD terms) spent a decent chunk of time below the 2018 DFS revenue hurdle. I digress.

Rather than concentrating on the AISC, which is important, the focus of my thinking is currently on the prospective (high) grades and tonnage (scale) that GS and the broader ST zone have to offer. Because high grades mean lower raw ore tonnages to be mined in order to extract the same (saleable) net Ni in conc. production tonnage. This will translate into lower COP, but the exact estimate I an unable/unwilling to provide without knowing just how much Ni is down there. That's why PH and the BOD are waiting for the GS maiden drilling to be completed, so they can plot the best way forward.

In any case, if GS proves-up as anticipated, I agree with Argonaut in that it will almost certainly provide an ore resource that will justify a restart that is (perhaps more importantly) robust across the Ni cycle. The last thing we want is a short-lived PAN-style restart, followed by another shutdown. It's a terribly inefficient and expensive exercise.

Hope that helps somewhat.

Cheers,
Z