Ann: Coburn Project Commissioning of WCP Advancing Rapidly, page-70

Turn up for the books... a bullish LT holder with buy sentiment, yet welcome questioning opinions, aware of commissioning risks and cautious to see performance reality match exacting DFS assumptions. It's long been said a first-rate intelligence is the ability to hold two opposed ideas at the same time, and still retain the ability to function... hat tip @VinceS2.

Risk awareness combined with confidence in the risk-reward equation over a given timeframe. The idea someone must be a down ramper if they talk about risk and are not super bullish is an anathema to me. I'm hardly welcome on the SFX thread these days for not playing along with the cheer squad but pointing out the reality of risks and differences that explain SFX lagging STA. Anyway, what VinceS2 just said is a perfect example of risk that hasn't been tested.

"The mineralogy will remain unchanged, caring for none of this, despite the thoughts and feelings of the humans that want to get it out and make $lotsa from doing so. Here STA are looking to take it out at a faster rate than has ever been achieved with (I don't know exactly what is improved) existing techniques that have struggled to perform elsewhere, and upside is being talked about, again with no clarity around how this is supposed to happen."

Since the 2010 DFS, the same Coburn deposit has delivered multiple large lifts in financial outcomes due primarily to two things: rising revenue and extreme lift in mineral recoveries. Below shows the 2010 to 2019 lift, followed by the smaller 2019 to 2020 DFS Update lift.

2010 Recovery Test Work
Net Ilmenite Recovery = 81% x 81% = 65.6%
Net Rutile Recovery = 84% x 69% = 58.0%
Net Zircon Recovery = 94% x 73% = 68.6%

2020 Recovery Test Work
Net Ilmenite Recovery = 86.8% x 96.2% = 83.5% (27% improvement)
Net Rutile Recovery = 87.7% x 84.7% = 74.3% (28% improvement)
Net Zircon Recovery = 98.2% x 99.7% = 97.6% (42% improvement)

Net improvement in all three products is enormous, especially zircon where the dry plant (MSP) has gone from 73% to a remarkable 99.7% recovery. Given 100% is max possible mineral species recovery, the MSP plans to operate close to perfection. Coburn has the advantage of low slimes, clean HM assemblage, large grain size but as VinceS2 said, they are pumping sand through at very high rates. I'm not saying tech hasn;t evolved, or these recoveries won;t be met, just that there is risk that recoveries from small samples in the lab do not translate to perfection at industrial scale.

Again, not trying to upset anyone, just pointing out that commissioning means ramping to continuous nameplate capacity not just building the plant. Mineral Deposits had all sorts of trouble in early years commissioning their Grand Cote dredge mine almost sending them broke. 55Mtpa dredge is a different operation to Coburn, but the deposit is not that different being low slime running sands with low grade (Grand Cote started with Reserve of 715Mt @ 1.8% THM). Build risk, commissioning risk, performance risk, price cycle risk etc, they all need to be kept in mind when spreadsheeting up those NPV valuations and future divi streams.

GLTAH