We wish you a Merry Xmas, page-23

Some may not like this post but I think I'll give an opinion and hope I am wrong.  Before the PFS came out there were three things I thought needed to be done - firstly, signing binding offtake agreements (to get the right perspective on price) and secondly doing the MET tests to get to 98% Min grade, but especially 98% grade)  and 99.5% Min grade (i.e. I note in the latest Ann on the resource upgrade they were talking about the second point as well by the way that they were doing tests aswell). 

The third one was a resource upgrade plus drilling to understand slope of the deposit to aid extraction rates, slope of pits etc and cost structures in pit design.  They have done this, resource upgrade albeit not done to recently, so the question is can this 'updated' data be fed into the PFS model in time for a December release date (given how cautious VA has been to date).  That will be tight but possibly achievable with a bit of burning of the midnight oil.

A PFS is plus or minus 25% so where prices are for vanadium not having binding offtakes now (to gauge prices for the PFS) may not be a concern given they will be well above US$10 per pound  -  but certainly will need them by a DFS IMO to get down to + or - 10%).  As to the 2nd point - MET tests - doing them to confirm your cost structures still remains a key too me as the MET tests (cost) will be higher in the oxidised layers as against the fresh layers (meaning using average cost in a PFS may be questioned within the PFS of plus or 25% given a likely higher cost structure in the oxidised layers as it is the first ore mined does impact IRR more so than if the oxidised layer was below the fresh layer and drilled at later stages in the IRR analysis). It is plus or minus 25% so it does bolil down around confidence around costs of getting there - through enough money, you will always achieve 98% grade but the MET tests here are really about confirming that you are correct + or - 25% that the average costs will come in at around $4.13 per pound (or lower.

A PFS is plus or 25% but I suspect it could be difficult to comply until you bed down your cost structures around the MET tests etc, i.e. I suspect they now have the data around pit design by the way etc.   I just wouldn't be surprised that the PFS is delayed. I don't have concerns around their gas assumptions in the SS, but suspect PFS will be aided with a long term 'supply contract btw" as I suspect having a long term supply agreement gives you better outcomes than the 'buying assumption' of a retail player which was in the SS btw.   Obviously, I suspect the PFS will ultimately confirm an opex cost around the US$4.13 per pound mark but I am not so sure we will get one this side of Xmas.  I hope I am wrong.

As to trading, been relatively thin last few days as everyone is waiting for the PFS.  Hopefully VA does get this out before the option conversion date - and by that I mean that it is cleared for release by the ASX as well.  Time will tell.  Doesn't impact long termers like me but the next two weeks could continue to be rocky for AVL IMO on thin volumes  - my only comment on TA here as when the PFS is released and I think it will be very good it would not take much to send this back north of 4c..

Personally I am now expecting a mid to end Jan date for PFS.  Might of well prepare myself for disappointment, but be happy if they meet the December date.  Anyway, just my ramblings this Saturday. As I said hope I am wrong.

All IMO