Grid Metals Corp V.GRDM

Back of envelope, PEA for Main dyke

[Mookster3]

Table below gives results from the first 34 boreholes completed on the Donner Main dyke. Dyke width averages 3.8 m and grade 1.6 % Li₂O, with widths holding up well, at depth. The drilled-off strike length of 800 m, depth of 300 m, width of 3.8 m, and specific gravity of 2.7, gives visibility to 2.5 mm tonnes of ore.
 
Considering Pilbara’s recent contract price of US $6300/t @ 6 % Li₂O, the ore was recently worth $6300 x (1.6/6) = US $1680/t.  Assuming mining, milling and trucking costs on the order of $150/t, and recovery of 80%, this leaves US $1194/t operating profit, presumably split between Tanko ($597/t), Grid ($448/t) and Lithium Royalty ($149/t).  At a modest mining rate, e.g.,1000 t/d, (or 500 t/d each from the Main and NW dykes; 7 yr reserves @2.5 mmt), Grid could potentially earn $US 156 mm/yr at recent lithium pricing.
 
Grid appears to be hinting at a smaller scale, lower footprint, underground ramp operation that won’t require federal permitting. Capital costs will be low and permitting should be fast-tracked, because construction of a mill, tailings facility, headframe, shaft, base camp, hydro lines, etc., won’t be required and there’s already a logging road right to the site. Experienced miners should be available from Tanko’s Bernic Lake operation. Prediction; Grid has a decent chance of beating all of the bigger name lithium players into production, to become Canada’s fist new lithium miner, since Bernic Lake opened up in 1968. The market isn’t paying attention yet, and is assigning Grid an enterprise value of only $16 mm ($30 mm market cap- $14 mm cash), but that could soon change. Grid is about to submit an application for an advanced exploration permit that will allow them to take a bulk sample for test milling at the Tanko mill and the Aussies are involved in this, and they seem to know a thing or two about lithium.
 
Warning; The above numbers are just wild speculation and The Mookster, in no way, stands behind these numbers. Investors are encouraged to do their own DD.
    
Donner Main Dyke;  2018 -2023 Drilling

Borehole	Dip	Distance along Strike      (m)	True  Depth       (m)	Drilled Width1    (m)	True Width1     (m)	Grade (% Li2O)
22-45	-45	-150 sw	40
22-38	-45	-150	80	3.6	2.9	1.7
22-39	-65	-150	150
22-34	-45	-75	40	3.4	2.8	1.5
22-36	-65	-75	60	3.5	2.0	1.8
22-35	-58	-50	150	3.8	2.5	1.6
22-37	-65	-50	190	7.5	4.3	1.8
ML1-8		0	67		2.9	1.3
22-40	-45	0	100	3.8	3.1	1.7
22-41	-55	0	160	5.3	3.8	1.8
ML1-7		100	60		3.4	1.8
22-31	-47	100	120	5.3	4.1	1.4
22-33	-45	100	190	7.3	5.9	1.7
22-32	-65	100	205	6.1	2.3	1.8
22-37	-65	100	270	7.5	2.9	1.8
ML1-6		200	82		2.7	1.8
22-29	-45	200	150	4.2	3.4	1.0
22-30	-58	200	205	7.1	4.8	1.8
22-27	-47	290	160	7.1	5.6	1.7
22-28	-64	290	225	9.0	5.2	1.6
ML18-5		300	100		3.9	1.7
22-23	-45	350	50	2.5	2.0	1.5
22-24	-70	350	100	12.2	6.1	1.4
22-25	-49	350	160	12.2	9.2	1.5
22-26	-65	350	250	10.5	6.0	1.8
ML1-9		400	51		2.6	1.3
ML1-3		400	80		5.4	1.5
ML1-4		400	150		3.8	1.4
22-42	-55	450	210	7.7	5.5	1.7
ML18-1		500	15		3.8	1.7
22-21	-45	500	75	4.4	3.7	1.6
22-22	-76	500	150	5.6	2.7	1.0
ML18-2		600	37		2.9	1.6
22-19	-45	600	100	4.2	3.4	1.7
22-20	-70	600	200	4.2	2.5	1.6
22-43	-45	650	120
22-44	-65	650	160
ML1-10		700 ne	106		0.7	0.4
					True Width	Grade  Li2O
				Mean (n=34)	3.8m	1.6 %

1) true widths assume dyke is subvertical with dip of -80^o. Where multiple Li zones are encountered, width is the sum of all zones. Mean grade is width-weighted.