questions for glauconite, page-17

Hi Guys,
I apologise for my tardiness in posting after the RWD AGM; I have been flat out with my day job and havent had time to gather my thoughts.
To say the RWD AGM was worth attending is an understatement. Ruane is a serious player and really knows his minerals and mineral exploration. He worked for RIO for some time in the LM region, and has his fingers (as we well know) in a lot of potash plays around the country. The RWD operation is also damned frugal with no uneccesary frills at the meeting (and, more importantly, no freebie options that many small cap companies tend to dish out. I have discussed the following with MR:

A. Lake McKay
Questions posed:
1. What is the state of play of the Lake McKay ?
2. How are the negotiations with the traditional owners progressing with LM? Is John Thurtell optimistic about a way forward?
3. What is the cost structure of this operation?
Answers:
John Thurtell is taking a group of NTholders to view the RIO LM Salt operation within the next 2 weeks. This Lake has been operated for ~30+ years already. A meeting with the NTholders is scheduled for early June, once they been taken over the RIO operation. MR is very positive about Thurtell and the likelihood of a successful negotiated mining deal.
The operating parameters are also very encouraging; The current Australian price for SOP $800-900/T. $200 premium to MOP (The Canadian product), while the OPEX. $80-90 road Freight to the railhead, Rail $30/ton Adelaide. To $40/ton Darwin. China currently imports 1MT/PA SOP, Australian consumption 500,000 tpa, all imported. Should have decision on this project before end of calendar year.

B. Moora Glauconite project
1. What is the planned method of purifying potash from the Alumina in the glauconite deposits?
2. What is the anticipated CAPEX and the OPEX for this process and what is the likely cost of production?
3. Can the sands be processed on site? What is the viability of mining on farmland? Can the farmland be remediated back to its original productivity after mining? Is there compensation for farmers? Do we have to buy the farms?
This project, as planned, will be carried out using a simple magnetic separation of the wastes from the alumina:potash complexes, followed by acid leach at 100C but at 1 Atmosphere (much less costly than nickel purification). Little waste issues, purification on site. Costs of land acquisition minimal (farmland pretty poor quality, currently selling for ~500 per hectare). Massive resource; conservatively estimated at 1BT.
Currently the data relating to potash concentrations are data obtained from Water Corp bores. RWD undertaking new (low cost) drilling with results expected in 2 weeks, Assay data 4 in weeks. Engineers are currently doing the flow charts required, expected Capex; about 200M in reply to question, so obviously a capital raising / Joint venture would be needed, however this Project will progress quickly.


C. Adavale project

Waiting for rig, all currently at work at the coal seam gas projects. No NT claim but must get heritage clearance, but this should be a formility.
Has spoken to Bauxite mine re caustic soda. Good infrastructure.
Previous scoping study done when bauxite op was much smaller; they now consume 1,500,000 tons of NaOH annually, all imported at a cost of ~$500 million. Potentially a major earner.

D. Officer project
Requires heritage clearance.
Could be massive


E. Willara project

Some difficulty dealing with Kimberley Lands Council at present (so whats new?) Expensive to drill. Could be massive project with the known Potash in the Kimberly resource possibly exceeding that currently mined in Saskatchewan.

E. Gascoyne project

NT ok so far for exploration. Project on back-burner at present, awaiting progression of the other more immediate projects.
Finally:
A. Lake Disappointment
Questions:
1. Is the Lake Disappointment project dead in the water?
2. If it is dead in the water what were the problems that lead to the impasse, or were the Martu just not interested in mining LD?
3. If it isnt what is the state of play? Can anything be done to expedite and ensure the process?
4. If the project is static, is there any point in Reward attempting to reopen the negotiations?
Answers:
It is possible the new WDLAC New CEO may be willing to enter into discussion, however it is also possible that RWD may enter into negotiations directly with the Martu people, bypassing WDLAC, should RWD want to re-open the LD project (and MR does not seem desperate to deal with WDLAC). There has, apparently, been some Governmental support for direct negotiations with the TOs by mining companies as it is evident the various indigenous corporations are not necessarily acting in the best interests of the indigenous TOs. If LD did get up, RWD would aim to ship via Pt Hedland to target the Asian market.

Finally, while the LD project is on hold indefinitely, it isnt dead (and wont be going anywhere without RWD). Its also worth noting that MR had lined up a $150M venture capital deal to get the project up and running and this was ready to go once the WDLAC / Martu had signed up the mining deal. So close yet so far.
In summary, my impression was that this is a company moving forward steadily. There are a large number of Company Making deals on the books, any one of which would be welcomed by other similar companies. I believe the management is strong, focused, and they have the interests of the shareholders front and central. The recent financial instability and uncertainty over the Rudd Mining tax havent helped, but I feel certain RWDs wil repay the shareholders patience, in spades, in the near future.

I intend to ring MR sometime again soon (I dont want to pester him as he has a lot on his plate) and will report back when / if I have something you all might want to know

Cheers,
glauconite