dfs

There seems to be a general acceptance now that the DFS was never released because it did not stack up with the given parameters (U price, M&I resource, opex and capex estimates etc).

As much as Strata tried to get it over the line (with piping requotes, optimisation studies etc) it couldn't.

Some like to hang on to the belief that the DFS was hunky dory and is being held over until market sentiment improves etc - but that is too long a bow for me.

It seems to me, instead, that the so-called 'expanded feasibility study' is largely spin - a delaying tactic - to stall things until the U price gets back up to reasonable levels and makes the project viable.

The general view here is that a combination of a rising U price and an expanded jorc resource will get the project back on the rails.

That is a more than reasonable view - particularly with respect to the U price. The expanded DFS also sounds reasonable, at least on the face of it, but I wonder.

I have been rather troubled in recent months by all the misleading guidance re the expanded DFS. We were told twice before the AGM that it was virtually complete and that it would be released 'shortly'. Then at the AGM, attendants were told, it would not be within the next 4 months.

(Note that the 4 months comment has never been corroborated in an announcement or official update. Very poor form, imo, given the pre-AGM announcements).

Because of this misleading guidance, I have recently trundled back through announcements and updates from around the time of the PFS release in mid-2010.

I am now further bothered because of what I have found.

What I am most bothered about is the extremely low rate of resource conversion (from inferred to M&I) since August 2010 and the very high cost of the very small gain.

The figures are all there in the updates.

In May 2010, Strata reported a M&I resource of 3.6m lbs. Between then and August 2010, with 4 drill working, it had a purple patch and increased M&I by around 150% to 9.6m lbs.

Since then, however, an expenditure of $18m has generated an increase in M&I to just 11.4m lbs - a relatively miserable increase of just 1.8m lbs.

That is the key metric forexpanded DFS watchers. Just 1.8m lbs in 16 months at a cost of almost $18m. How or what will change that going forward?

How can Strata significantly raise the rate of conversion in a situation of increasing funding scarcity? (Remember, it has to lock away around $10m of its own funds for the reclamation security bond - to get the PTM - if it cannot raise this security in the market place).

There are now only 2 drills in operation - the same as it has been doing since late 2010. So how will he rate of conversion be increased from the current paltry rate?

And, as a further matter of interest, why has there been no resource update since June?

It seems to me that the future health of this project is primarily dependant on a significantly higher U price. Gus' erratic behaviour over the past 6 months re the DFS, together with the reality of conversion rated since August 2010, does not inspire me with confidence about the expanded study outcomes.

But very happy to be wrong.