Takeover ?, page-27

The 18 month option gives OZL & HAV to do two important things.
Currently the orebody is studied to PFS level.
The idea of a PFS is to put some idea of valuation around the project and determine how best to go forward.
A DFS usually delivers a project study with sufficient certainty to seek funding .
To get form PFS to DFS there is a large spend in getting a portion of the resource form resource to reserve and inferred to measured.


However also pretty important is to see if there are ways to enhance the project economics.
I went though this process at CZI (Cassini resources) in moving the Nova-Bable project form PFS to FFS close to DFS. OZL had the right to go to 70% of shareholding with a specified spend.

What OZL added & demanded (we don't know which but I can guess) was the extension of mine life from 12 years to 25 years (or so) but not with enough drilling density to be DFS level. They also did extensive variability testing on difficult (oxide) ore and added a new type of horizontal dry crusher grinder. Plus raised grind size, included wind & solar power plus a few other bits and bobs. I don't know that they improved efficiency that much but there was a higher level of certainty and mine life. It also gave the Ni price a chance to rise to a level which it is strongly economic. Note with a positive DFS the asset value should be 40 to 45% of NPV.

They bought the project out from CZI for less /well less than that but for mainly OZL Shares which jumped after. (As far as I can see BHP & NCM are trying the same Sh. with Solgold Ltd). I would expect much of the same with Kalkaroo. (I'm sure the crew at HAV knew the details).

If OZL choose to walk away at the end of it good luck.

There I've summarised three to five years waiting/work depending on your point of interest.

All IMVHO.