30.3 mt @ 1.70% cueq, page-92

Gents a good discuss with some excellent points raised.

Here is an alternative view from someone close to the project:

My understanding is that to quote a resource using copper equivalency, the grades, the comparitive pricing of the metals and also the recoverability of the various metals all have to be all taken into account. The final result is a very accurate assessment of what you will actually get when you mine the stuff. ie The copper equivalent resource can be considered as delivering the same value as if we were to mine and recover 30 mt of pure copper grading 1.7%. Also, for copper equivalency to be included in a measured/indicated JORC resource statement, which confers extremely high levels of confidence on what is tabled, the competent person has run a very stringent ruler over the likelihood of the quoted recoveries and grades actually being achieved.

The current stated resource can be regarded as bullet proof and Hellman and Schofield should hang their heads in shame. One wonders how such a small amount of additional drilling can define an additional 600,000 tons as per the latest findings of the new consultant Andrew Vigar of of Mining Associates. Of course the copper/metal mix was there all along, just not stated as such for reasons best known to the former consultants.

Effectively, what we have is 10 years of mining a resource of 30 mt of 1.7% Cu, a very substantial open cut mine for starters. And the reality is that in the first years of mining, they will be averaging much higher grades, and in the later years, grade depletion will be compensated by extra throughput tonnages to maintain the same amount of product.

As for the cobalt price, yes at first glance it appears a tad high however, it looks to be allowing for very substantial credits from the pyrite also contained in the cobalt concentrate, not to mention the magnetite which virtually comes for free from the residue after all of the processing has been completed. (The pyrite is used for the manufacture of sulphuric acid which is, and will continue to be, very much in demand) Keep in mind that the profit from the cobalt/pyrite as mentioned in the recent funding announcement returns close to 80 cents per share, and virtually means that all of the copper comes for free.

From yesterday's announcements it is reported that the company expects to ship 350,000 tons of total concentrates annually. Now given that around 200,000 tons is cobalt/pyrite concentrate, it leaves 150,000 tons for copper/gold concentrate averaging say 40%Cu because of the high copper grades.

ie Effectively delivering 60,000 tons of copper worth $8,000 per ton and after tax, a very very respectable $1.70 per share. (assuming 200 mill shares). And if you use today's copper price of $8,500 and allow tax of 20% rather than 30% because of depreciation allowances, the numbers come in at just over $2 per share.

For steak knives, scabbing off tons of virtually pure copper through the rolls crusher circuit designed to liberate the native copper before using a traditional flotation approach, should ensure that we will do much better than those figures over the first 4 years. Keep in mind also that Oceanwide have signed up for 20 years not 10 years, no doubt taking into account the potential for underground resources and other regional resources to add to the mix. People forget that their due diligence under strict confidentiality agreements would have given them access to a lot more critical information than you will ever find on the public forums. And as it happens they paid a premium for a 20% stake and want to go to 30% as a cornerstone investor.

My only concern about the cobalt/pyrites was uncertainty about whether there would be a ready market for it but the Oceanwide Offtake agreement dispels any doubts on that score.

I hope the above provides some balance as to how the company should now be viewed after a flurry of recent de-risking announcements, including sensational gold hits at Wilgar. Rocklands is now an extremely strong story with only an upside from here.