Corporate Update, page-7

Agree with quite a few things you have written. As a likely low cost producer - at less than US$4.50 per pound - too me it has always been about confirming the MET work and DFS that this cost outcome can eventuate. If so, the mine will be viable even if V205 prices for min 98% grade come down to US$10 per pound (add an extra US$3 per pound price for 99.5% electrolyte for battery needs). In terms of your comment around financing, I suspect they will go for a equity for Offtake Agreement thus reducing the amount of finance they will need from say ‘banks’. In part they will need equity for Offtake in any event as I suspect a bank will not lend the full value of the capex to fund mine construction.

IMO to get the best deal on equity for Offtake (either as part of fully financing mine development or at least having a large proportion locked up) will be critical for capital markets where some bank finance is required. Need only to look at PLS to see that is what they did - some equity for Offtake Agreements then used those to say we will have revenue/buyers to secure some external financing. And to get the best deal, AVL needs to speak to both Chinese and non-Chinese potential customers, so as to create the contestable market to get the best deal for us mere mortals in pursuing some equity for Offtake agreements, been SH of AVL.

Timeframe to market is the key, and getting the above right is fundamental to entering the market in mid 2021 as implied by their presentation. Target steel market first to gain that entry, then deal with batteries thereafter. And if get a respected buyer in one of these equity for Offtake agreements, like PLS when they got Gangeng, the SP will look after itself.

All IMO