Ore sorters, concentrators and iron grade discussion, page-15

You won't yet find any commentary from TG6 around sub 20:1 strip ratios. They have instead used pit shells but these pit shells but the upper pit shell referenced have the potential to create strip ratios beyond 20:1. The average cost is unclear but an unfortunate consequence of releasing pit shell information is investors assume the worst and confuse the top marginal cost under consideration for an average cost despite pit shell calculations not being average costs.

Using A$5/t as a default cost estimate for the cost of moving waste rock/ore, if you have a 19:1 project then you will be moving 20t of material for each ton that makes it to the ROM pad. The ROM pad will be receiving A$100/t ore. If a project has 1.3% ore grade and is producing a theoretical 6.0% product with a 70% recovery rate then 6.6t of material needs to enter the concentration process or each ton of output. 6.6 * (1.3/6.0) * 70% = 1.001

When you add on concentration costs, site G&A, transportation logistics and royalty costs, if the ROM pad ore has a A$100/t cost this is unlikely to generate an SC6 equivalent cost below A$1,000/t. Because A$1000/t seems to be the current divide thinking between ok costs and costs are that a bit too high, looking to keep strip ratios below 20:1 would be sensible. If TG6 were to start putting out scoping studies with scoping studies above 20:1, its likely to get the market reception that GL1 is currently receiving. At the moment its hard to get a handle on likely strip ratios but it will be a factor concerning potential investors.

The table below is from GL1 which is currently one of the projects with one of the higher strip ratio's around. Stages 1-3 are ok (12.6 - 14.6:1) but stages 4-6 have strip ratios of 22.6:1 to 33.4:1. The overall project is 22.2:1 (419.1 : 18.91). GL1 is being absolutely hammered by the market, presumably in part because of its high strip ratio. GL1 is looking at UG re some of this project to lower its strip ratio and overall costs - presumably stages 4-6.