denny dalton feasability, page-76

re: denny dalton feasability - t4p nizar...

I should clarify...

The original resource calculation of 31.5m tonnes u3o8 @ .35 Kg/t (11,025t u3o8) was orginally used by Southern Sphere back in 1981 for a feasability study.

At the time, uranium was about US$8-10...and as such, it was decided not to commission any mining.

The more recent works you refer to were specifically gold related, but as the distribution values at DD are parallel for both the gold and uranium, the gold results also have an obvious impact on the uranium side of things.

You may have noticed the increased uranium grade from .35 to .54 released in the recent announcement?

Even since this more recent updated information, uranium has doubled again, suggesting yet another possible upgrade here?

I think a bit of sneaky stuff might be going on?

Higher resource prices result in lower economical cut off grades. In AEX's case, instead of maintaining the same grade or even reducing it and increasing the contained uranium, at this point, AEX have kept the contained uranium figure constant, but increased the grade as an off-set to the increasing cut-offs.

This is a little unusal, but does suggest what might follow?

Next I suspect we will see a drop back to .35Kg/t and subsequent increase in resource tonnage...resulting in a likely upgrade to around 16,000t contained u308?

Of course, drilling with further add to the resource. Not only upgrading much of the inferred resource to measured and indicated status, but also increasing the footprint of the known resource via extending the currently known limits, many of which are open in several directions.

A little further down the track, we can also expect the cut-off grade to be even further reduced, currently .25Kg/t is more than acceptable for some other uranium hopefuls...and with a rising u3o8 price, this could arguably drop even further. At .25Kg/t cut-off grade, we could be looking at something closer to 30,000t u308?

This could even get lower again given we have a multiple metal situation here...the same shovel will dig out both uranium and gold at the same time!

Price rises in either metal could have a further positive impacts on the project economics and ultimate resource size.

Recognise the pattern here? If not, I suggest you do some research on PDN...you might be amazed at the similarities?

Now...lets not forget their 2.5m ounces of gold at a grade of 2.5g/t.

Remember...the gold and uranium are equally distributed at DD...as such, an upgrade in the uranium resource should also equate to an upgrade in the gold resource?

So...assuming all goes well, we should eventually see a near doubling of the uranium resource and by extension, a near doubling of the gold resource...yes...that's a possible 5m contained ounces of gold!

Remember, the entire resource is an average 1m thick...so we are not talking major open pit scenario's here.

The market may be a little slow at times...but I am sure they will eventually work it out?

In the meantime however, some larger players obviously want to see a lower share price...best not to argue with them, they are probably bigger than most of us?

Cheers!