Resource upgrade soon - Highest Grade Graphite deposit

With just 2 weeks left of the March quarter the updated resource and reclassification should be imminent. The current known resources are based on work done in 2019 and earlier. The upcoming resource update will be off the back of the 22 drill campaign and the previous drill campaign.

Current Resource (2019)

Zone Tonnes(Mt) TGC (%) Contained Graphite (Mt)
North 159 28.8% 46
Central 49 27.5% 14
Total 209 28.5% 60

They key numbers for the updated resource are:

1-Total resources

2-Total resource grade

3-Tonnes converted from inferred to indicated

4-Grade of the indicated resource

5-Cut off grade used

1)I think it is safe to assume that the total resources will grow, by how much is the question.

From the Ann “Mineralisation extended up to 1KM outside existing resource”:

• Mineralisation now extended beyond the existing Mineral Resource up to:

- 1,000m south-west of the Northern Graphite Zone (NGZ)

- 800m south-east of the NGZ

- 150m north of the NGZ

- 300m north of the Central Graphite Zone (CGZ)

2) Total grade hopefully won’t deviate much from the current grade. If the cut off grade is lowered then that will result in an overall lowering of the deposits grade but will be reflected in increased tonnes of graphite. Considering the size of the resource I don't expect any need in lowering the cut off unless mine economics make financial sense to, which would not be apparent at this stage.

As anyone following would know there have been some AMAZING drill hole results such as:

- 47.4m @ 33.4% TGC from surface

- 75.1m @ 34.6% TGC from 2.0m

- 62.0m @ 27.5% TGC from surface

- 30.5m @ 34.1% TGC from surface

- 77.5m @ 28.8% TGC from 5.2m

The depth of the deposit is going to have a huge impact on the economics.

3) Next investors has the following as their targets:

Our expectations for the upgraded JORC resource are as follows:

Bull case = Total contained graphite >20mt in the “indicated” resource classification.

Base case = Total contained graphite 15-20mt in the “indicated” resource classification.

Bear case = Total contained graphite <15mt in the “indicated” resource classification

4) The grade of the indicated resource may increase if they are targeting the higher grade from surface ore as the basis for their economic studies.

5) The current resource has a cut off of 15% graphite content which is very high for a graphite deposit. In SYAs presentation on the 14th of Nov 22 (slide 14) there are 6 deposits (not including SGA) with a grade greater than 15%. Balma being the biggest with ore Reserves coming in at just under 17% using a cut off grade of 7.2%.

Given the current market cap for what is a huge, high grade, shallow deposit I am hopeful that the upgrading of a portion to indicated will go a long way to instil confidence in the deposit and help rerate the MC. Exciting times.