James Bay DFS, page-3

James Bay – Aussie comps suggest “unearthed” value

JAMES BAY SPODUMENE PROJECT– A RE-CAP

 The James Bay lithium pegmatite project is located in north-west Quebec, Canada. The project is currently 100% owned by GXY, but is subject to an earn-in by GMM whereby it can earn 50% of the project by spending US$5m over a 3 year period. The project was acquired by GXY in through its merger with Lithium One in 2012.

 Lithium mineralisation at James Bay is associated with spodumene-bearing pegmatite dyke swarms, which vary in width from 60-100m. The dykes generally outcrop at surface, and form a dis-continuous corridor over a strike length of 4km. Almost all the pegmatites at James Bay are known to be spodumene-bearing, with coarse crystals ranging from 5cm to 80cm.

 The project currently hosts resources of 22Mt at 1.3% Li2O (2010), and is currently at the pre-DFS stage. We understand that a project team is currently being assembled, with an infill and extensional drilling program planned to commence in mid’16 on completion of the North American winter. We expect this to lead to upgrades to the current resource ahead of feasibility studies which could commence in 2017.

 While the project is relatively early stage, the geometry of the current resource appears amenable to open pit mining, while the coarse grained spodumene mineralisation is likely to respond well to conventional processing. Subject to the completion of feasibility studies, we note a number of similarities to Mt Cattlin in terms of project scale and potential production potential, and anticipate Mt Cattlin could serve as a potential development blueprint for the project (i.e. 1-2 Mtpa plant capacity, 100-200ktpa spodumene concentrate production).