Ann: NAIF to provide $50m Finance for Butcherbird Expansion, page-33

100% understandable, but slightly unfair.

E25 did manage to sufficiently engage with capital markets to raise the money for the initial setup. They did navigate all permitting issues. They did get an operation going that shipped ore. 100% fair about communication. Its now clear they failed to appreciate the issues that clay, and particularly wet clay presents in a processing flow sheet. This included all stages of the flow sheet from screening to final beneficiation. Presumably a contributing factor was that test work would have been undertaken on incredibly well washed material and not provided insights to issues involved in getting it to that state. Scaling up the washing from lab-based test work to production scale didn't work well. Many of the problems weren't in the commissioning they were in the equipment selection. I'm now of the opinion you could have put an excellent team in charge of the equipment they had onsite at Butcherbird and you would have got a similar result, except that excellent team would have had vastly improved speed in coming to the conclusion different equipment was required.

The revised flow sheet isn't simply swapping out the optical screener for a DMS plant, there's also amendments to better manage clay issues and stuff around operational efficiency such as mining camps, Air strips etc. Items like the airstrip are for improved efficiency in moving staff and any light-weight critical items. Other airstrip options exist, but just inefficiently further away so the low-cost startup didn't address this issue. This is an item that would appear possible to modestly defer if the project is running over-budget.


Regarding management implementing a cutting-edge facility, there are two critical issues. The first is the US facility isn't being built on a shoestring budget. Butcherbird ore has been put through two independent American lab's to confirm it works. Most of the technical stuff is in the people designing and making the equipment that the ore will ultimately pass through. This is independent skilled consultants, not the management team. Its not quite this simple, but if you buy an ICE vehicle, you don't need an incredible technical skill to turn the key and run the vehicle despite the incredible design and engineering skill that went into making the engine within the car.

The second is that its likely E25 will have a large number of applicants for the site manager role (with a suitably glorified title). Its this site manager that will need to deliver successful operation of the HPMSM plant.