race to the finish line, page-47

Hi all,

I’ll go through my thoughts point by point.

Zircon

1. The Zircon is planned to be mined and separated during the dry plant process. (See AGM presentation point 3 under the heading “Expected Process Stages”. I wish the management would put page numbers on their power points)

Size of Resource

2. I would draw your attention to the fact that the tonnage presented is for < 5% of the area of the alluvium fan.
Wet Processing to Produce HMC
3. The alluvium is dry mined and taken to mobile washing plants. The results from this process is for every 40 to 66 tonnes of alluvium one tonne of HMC is created. All the alluvium tailings returned to the excavation sites. (AGM Presentation ‘Mining and Stage 2 (wet HMC) processing concept’)
4. The HMC at this point has a concentration of 6.25% TREO. In the AGM they suggest this to be achieve at sand mining costs, which I believe to be about $2/ tonne of alluvium. So assuming a high estimate, say about $150 to achieve a tonne of HMC.
5. The HMC figure takes into account the recovery rate to this point.
6. Let’s do a comparison with other rare earth resources ((http://www.arafuraresources.com.au/nolans-project/nolans-bore/resources.html):
Baiyunebo, China:- 1,460Mt @ 3.9% REO
Mountain Pass, USA:- 31.6Mt @ 6.6% REO
Mt Weld CLD, Australia:- 14.95Mt @ 9.8% REO
Dong Pao, Vietnam:- 11Mt @ 6.9% REO
Dubbo, Australia:- 73.2Mt @ 0.9% REO
Nechalacho, Canada:- 315Mt @ 1.36% REO
Nolans Bore, Australia:- 46Mt @ 2.5% REO
Steenkampskraal, South Africa:- 0.25Mt @ 11.65% REO

Dry Plant Processing

7. The proposed dry plant processing by magnetic and electrostatic processing which will separate the monazite and xenotime then creates a new concentrate with >35% TREO and the company is targeting 50% TREO. (AGM Presentation under heading ‘Dry Plant Processing’)
8. Assuming a 100% recovery of mozinite and xenotime will mean for every tonne of this dry plant recovered concentrate 5.6 tonnes 8 tonnes of HMC will need to be dry processed.
9. At 70% recovery
10. The dry processed concentrate will have between 350 and 500 kgs of TREO.
11. About half of the HMC processed will be zircon, or about half the total HMC processed or say 6 tonnes. (I think!)
12. Assuming a cost of $25 for the creation of this dry processed tonne by this magnetic and electrostatic processing to this stage the cost of the dry processed concentrate is about $250/tonne or 25 cents/kg.
13. Assuming a value of the TREO at $50/kg the TREO in the dry processed concentrate will have a value of between $17,500 and $25,000.

Extraction of Saleable Product

14. I’ll quote the AGM presentation:

(c) Extraction of initial saleable product: production of a range of oxides / hydroxides on-site in a small low-cap site plant (because of high grades) using proven technology on ideal mineral feed-stocks in a regime similar to with nuclear materials, which are by-products of this processing.
It seems extracting and processing CUX’s Charlie Creek resources will be very profitable. (AGM under heading: Crossland's development concept for Charlie Creek Alluvium deposits.)

The next question for Torpedo, Ausheds and Borisdog is why are our opinions so diverse? I’m happy to try to work towards a consensus because I want to be realistic about this.

Cheers