posters some questions & answers of sorts, page-53

Jantimot, from the MPS report :

"A further area of contention is over the possibility that RC (Reverse Circulation) drill holes are not accurately reporting the true grade of the intersections. An explanation offered suggests this occurs when the RC drill bit intersects nuggets of native copper. RC rigs would usually pulverise the ore into very small pieces which are then sucked up to the surface and bagged for analysis. When a RC drill bit intersects nuggets of native copper, the drill bit does not pulverise the metal but rather can push the native copper nuggets into the surrounding soft clays. MPS undertook analysis of 100 random drill intersections on Las Minerale released to the market. 70 of the drill samples came from RC holes for which the average grade returned was 2.3%. The remaining 30 drill hole assays came from diamond core holes. Interestingly, the average grade of the diamond holes was 30% higher averaging 3.0%.


"This bonanza zone suggests to MPS that the actual mill feed could be significantly higher in the early years than the 11.66Mt @ 2.05% Cu Eq implied. Moreover, the bulk tests on over 5 tonnes of diamond core recorded 4.37% Cu.
MPS believes this bulk test and the occurrence of substantial rich intersections suggest the mill feed grade could be well in excess of 3.5% over the first 4 years."


"MPS expects the likely scenario to be that the RC holes have been underreporting true grade. As such, MPS view the base case +40% grade adjustment scenario as our best estimate of the Rocklands deposit."


MPS has a firm base case NPV of A$4.01/share & a grade adjusted NPV is A$7.70/share .