Ann: Presentation to Shareholder Meeting, page-335

Just going over some of the points raised over the past couple of weeks, particularly with regards to capex and costings.

I have been reviewing the AJM PFS & DFS in particular, mostly because I like the way their information is organised, plus you can already see how they are building their site (as it is almost completed). It is in no way attempting to compare the two companies, other than to give us a reasonable idea of what things should cost.

Capex
In terms of capex, the amounts are not as bad as a lot of fly-by-night commentators have suggested. One of the huge costs in BGS capex allocations is the amount of contingency at ~15%. Note that neither the AJM PFS/DFS use a contingency at all.

AJM DFS: $104mUSD no contingency for 1.5mtpa plant.
BGS PFS: $75mUSD for 1mtpa;$109mUSD for 2mtpa (neither with contingency).

As you can see, that is actually much cheaper than AJM costs, mainly because we do not need a HPGR crusher (I think). Remember also that as our head grade is higher than AJM, we actually would process more spod even with the same size plant. This is very positive imo.

Mining Cost
Personally I cannot get my head around how our mining costs will be so high. Understandably, one of the highest costs in Australia is the labour, and that is what is mentioned in AJM's DFS. Also their strip ratio is higher than BGS (using the smaller pit) at 2.9:1 (BGS 2.6:1).

But AJM comes out at 72/t and we come out at 73/t. How? We have way lower labour costs, lower strip rate, should be much lower. I could be wrong on this though so i'll reserve judgement.

Processing Cost
Again AJM has 96/t processing costs, BGS has 124/t. We were told this is due to the addition of the flotation circuit, but AJM has everything we have plus the HPGR crusher. Now I know scale has an impact on these costs and to be fair, at 2mtpa our processing costs are 91/t. But surely the scale of a 2mtpa plant provides better leverage than a $5/t difference to a 1.5mtpa plant?

Power
I noticed they will have an 11MW diesel plant built. We are bringing in 12x1MW gensets. At the worst we could do what AJM is doing, so I cannot see how our costs can be higher than theirs when we are both relying on the same power source. Plenty of scope here for hydro/solar too imo.