don't look back, page-33

Thank you Devander. The broking report you quoted (http://www.minesite.com/fileadmin/content/pdfs/Brokers_Notes_July08/UraniumBGF20July2008FINAL.pdf) is dated 20 Jul 08, so it is really only talking about Ida Dome. By this date there was only limited indications that there might be something at Rossing South, alluded to in the quote you gave.

Ida Dome JORC came in at 25 Mlb @ 213 ppm. Rossing South Zone 1 is 108 Mlb @ 430 ppm and Zone 2 is estimated to be 136 Mlb @ 392 ppm. The combined total of just Zone 1 and 2 looks to be about 10 times the size of Ida Dome at twice the grade.

Some on HC think these estimates are low, and expect 300 Mlb for Zones 1 + 2. That figure came from Tibbs, a respected poster on EXT and BMN threads. If accurate, that means Rossing South would be 12 times the size of Ida Dome. (See http://www.hotcopper.com.au/post_threadview.asp?fid=1&tid=873467#3940219)

Further zones have not yet been explored. Only 6km has been partially explored, out of about 15 km.

So a figure of US$29 per lb is based on Ida Dome, a resource of 25 Mlb at 213 ppm. Rossing South is already 10x, might be 12x or even greater than that, at twice the grade. How will this affect the extraction price?

Probably the most important factor affecting extraction costs is grade. Twice the grade means half the amount of rock needs to be blasted out, dug up, transported and then crushed. The crushing site only needs to process half the ore, so it only has to be half the size to extract the same amount of uranium. It is too simplistic to assume that extraction figures would be precisely halved for a doubling of grade, but that would be a reasonable first guess with limited other information at our disposal.

Next consider the terrain and ease of getting at the orebody. Ida Dome is in fairly rocky terrain with hard overburden. Rossing South is underneath sandy, flat terrain. Ida Dome's ore is not concentrated in one area but is scattered about, whereas Rossing South is in two huge contigous areas. Extraction costs again should be much lower.

Thank you for pointing out the report. I had dismissed Ida Dome from my considerations so I hadn't seen it. In my opinion, the above arguments indicate an extraction cost for Rossing South in the region of US$15 per lb.

Put it another way. A company looking at two potential takeover targets, one with extraction costs of $15 per lb and one with costs of $29 per lb, can afford to spend $14 more per lb of uranium in the ground for the first takeover compared to the second. This indicates that EXT holders can expect a great price to be paid for Rossing South.