q&a snippets from agm question time, page-18

Pay particular attention to Eric's comments.
And the difference in his confience level and what NC is prepared to say.

QUESTIONER

…and that sort of took the bit out of my sales so I do apologize in that sense to the shareholders.


But I think the essential thing that I tried to express is still there. There are no petty agendas when the share price has dropped by 90%. So there is….you should bear that in mind. And I think that one would have thought that Rare Earths would have performed….it shouldn’t have nosed over like it has and basically been going down.

But the question that I have to ask is for Mr. Noyrez and it is this. Aside from the profitability and how the world economy and everything else works out whether it’s visible or not visible. Apparently right now it is not visible. But can you us the shareholders a categorical yes or no or perhaps a detailed answer as to if there are any ongoing operational issues especially when you ramp up production from 500t (sic per annum) to 11000t.? What will happen to disposal of the, the material? How will you get rid of the activity which apparently cannot be removed? SO are you going to turn it into bricks and just start shipping them? Aah my question is, Sir, is there any surprises left now or is it simply a matter of how the world price and the competitors and the others sort of equate with each other?



CEO

It’s the right questions you ask….I mentioned we have developed two products containing the residual of community concern and it has been proven, independently tested as non leachable, non radioactive and non toxic………(not discernable), by the way there are hundreds or millions of tones of that type of product used in the world. Aahh take the market for gypsum is about 300m tones in the US. Half of it is from synthetic. Means from chemical operations. Just to give you a sense of magnitude. So….we are a very small producer and we will make product out of it. So I’m confident we can, we can sell it.

Our product trials in agriculture are working very well, all plans are going well…and we have …trials in this country and in some other country to make use of the valuable product.

Comment has been made about the cost I think its just completely wrong….difference between tones and kilograms so businesses would be profitable.

(CT comment – I am not sure specifically what Eric was referencing here….look to others for contribution or confirmation – I’m guessing there was some data put out suggesting that this part of the co-product transformation would not be profitable and again the data had a decimal in the wrong place….tonnes or kilograms)

CHAIRMAN

…..aaah to I think the core question is Eric which is ahh how confident are we in term of our ramp up now, obviously there are operational….

QUESTIONER

That’s exactly my question aaah….

ERIC

Oh the operation, the operation and production, yes we are confident. I think if you look at the November data, and we cannot make forward statement for reasons….lets look the November data as an outcome of completion of work programs which is more than for the previous quarters, you will see the ramp up is significant. And you will get the truth at the end of the year. And the quarter following.

Phase 2 is identical to phase 1 so its not major difficulty in starting phase 2. And we not obviously getting the issues because the work programs are replicated on phase 2 as well.

QUESTIONER

So no commissioning problems from now on Sir

CHAIRMAN

(Interjecting)…well no, I think it would be naive and foolish to say that a operational plant of this magnitude will have no operational problems (emphatic).
Do we have the team in place, the knowledge and the capacity to overcome operational issues as the previous speaker with experience said which are common in industrial operations of this nature? Yes we do. And yes we are able to understand better today than we did 12 months ago the realities of operating with this plant. We have made significant plant modifications based on data. Analysis. Root cause analysis and understanding. The team is across the processes and work programs and we are progressing. It is a journey. It’s a journey that continues. It’s a journey that will have its ups and down moments but we believe we are well positioned for significant growth in the future.

The share price is a frustration Sir, not just to you, but to me, and every other shareholder in this, aah, in this room. We recognize that. I acknowledged that in my particular aah opening address and will continue to acknowledge that it’s been a bad year from the share price point of view.

Correction to that is intimately linked to what you first said which is successful operation, successful ramp up and successful production. Then I think the credibility and trust in the company from the investor point of view will increase and hopefully that will translate into a higher share price.

Thank you for your question.