Ann: Maiden Mineral Resource Estimate & JORC Mineral Resource, page-115

If I have a bucket of sand, and you tell me the average % of metal in the bucket is 6%, then it shouldn't matter if the metal is evenly distributed in the bucket, sitting at the top, or sitting at the bottom.6% is an average for a reason, it takes into account the total volume of material in the bucket.

If you say, okay, the majority of the metal is more highly concentrated in this section of the bucket, say sitting on the surface, or piled in the middle, so you can just take out that section of the bucket.... Okay, no problem. That means the volume being considered (tonnage) goes down, but it means the grade (% per volume extracted) will go up.

If hypothetically it is economical to mine the entire bucket at 6%, then it is economical, no matter the distribution. The cost of taking out the lower grade sections is averaged out by the return of taking out the higher grade sections. This is why it is an >average<.

So the question is, is it economical to mine the whole area at the stated average %.And if it is preferable to target higher grade sections only, then the tonnage goes down, but then the grade goes up, logically.

Which, surprise (!), seems to be exactly what they have stated in the report:
• 593Mt @ 6.2% THM (5.0% cut-off)
• 252Mt @ 7.3% THM (6.0% cut-off)
• 113Mt @ 8.3% THM (7.0% cut-off).

So, what about all the waste material, you might say? That's what the cut-off is, it's been already factored in, obviously.

Saying "oh they won't bother mining those lower % sections..." ....well, yes, this is implied in the grades they have provided, at the specified tonnage. Those lower sections haven't contributed to the grading, in so far as, their economic value (below cutoff) has been excluded, to produce the final grades as stated.

So it is neither here nor there to sit here and say which bits they may or may not mine.They very well may just target and dig out those higher grade sections. And? Is this news to anyone? It is literally written in the report.

What is more important is assessing the costs; fixed equipment costs, extraction costs, transport costs, etc.If you can calculate the fixed capital costs plus the cost per tonne to mine, then you can decide:▪how much overall tonnage >needs< to be extracted to meet your fixed plant costs (break even)?
▪what % grade (gross value) is needed /tonne to meet the extraction costs/tonne.

Then, and only then can you decide whether to mine the whole lot, or to target just the higher grade sections, or target high grade first then branch out, or just not.

It may be that it is only economical to target the 113Mt @ 8.3%, and nothing else. Well, to extrapolate on 2ics figures, that would still be $793m gross.

6.5% = $5.50/tonne gross (figures provided courtesy of 2ic)
Therefore, basic maths, 8.3% = $7.02 (5.5/6.5*8.3)113Mt (113000000) * $7.02/t = $793000000 rounded down, gross.

Can someone please demonstrate to me that the CapEx + OpEx to mine 113Mt of sand material is equal to or greater than $793m?

Thank you for your time.