Ann: Ammaroo Phosphate Drilling Update , page-2

Hello my fellow Rumblers

Been doing some rumbling around about Rum and the recent increase in Share Price from its lows to see what might behind it with the latest updated announcement they have put out.

As I see it, the Report that came out looks pretty interesting for the following reasons. BTW, Thank god they finally got the message about laying out where in relation are the various ore grade bodies lay, so this updates makes understanding it clearer.

1. We have nice tight patches of high RED quality ore above 30%, easy to access and no beneficiation required. They could just get some equipment out their and dig it right out of the ground and take it to a Spur on the North South Line and up to Darwin. Quick money and very little outlay by road and rail north.

2. Then we have the BLUE area which indicates ore bodies above 15% before beneficiation. With beneficiation this will surely increase the level of P2O5 to a higher concentrate. The level of beneficiation and the method used will be interesting to see and weather this can be undertaken at site or sent down south.

3. Then we have the YELLOW marked area, which is large and is below 15% P2O5. Cut Off is 15%. I don't understand why however they cut off is 15%, when you look at MAK's Wondarah Project and I note the following -

JORC & NI43-101 Compliant Inferred Resources at 1,258Mt @ 12% P2O5 NOTE: ONLY inferred resource is only 12% P2O5.

MAK's 42% interest in Namibian Marine Phosphate project is JORC Compliant Resource of 1,507Mt @ 18.7% P2O5, source : Mine Makers website

This is only 3% above RUMS CUT OFF. I would like to know the grades of the yellow but I am sure that will come in time.

4. RUM state?

These results are based on a 15% P2O5 cut-off. Rum then go on to indicate the following

" Brazilian mining giant Vale paid 3.8 billion dollars to buy into phosphate mines and fertiliser plants in Brazil in 2010 including 5 mines (Araxa, Cajati, Catalao, Tapira and Patus de Mines) with an average grade of 8.4% P2O5."

From this I read the following -

a. The Brazilians are buying up MINES PRODUCING 8.4% P205 grade, which will require extensive beneficiation to reach quality of 30% for export.
b. The Mak mine in Wonarah is inferred at 12% P205 grade again requiring beneficiation.
c. RUM on the other hand have a cut off at 15% P205, and yes it will require beneficiation however, in addition Rum state that they have multiple intervals of over 30% P025, which can be exported without any beneficiation. I don't understand why they have set the cut off as high as they have.

Anyway, Barrow Creek and Ammaroo if they have a higher level overall should be lower cost operations than those of the Brazlians and Mine Makers in relation to beneficiation processing.

In relation to Wonarah, freight is going to be more expensive for them. For RUM it will surely be less in cost due to distance from source to rail to port for high grade ore. It?s the beneficiation process and seeing if they can do this on site without having to send it down south and then back north for export. My hope is also RUM can upgrade existing roads and avoid rail infrastructure costs.

I do find the following statement 'encouraging' from the recent update announcement -

"The diamond drilling data will make it possible to upgrade the classification of the JORC status from ?inferred ?to ?indicated?. " I believe personally that this will depend on the results of the Diamond Drilling. But I might be wrong. I am sitting on the fence in this regard to see which side it falls.

IMHO, if RUM can go directly to a "INFERRED Resource", that gives RUM one step up the ladder over some of the other projects both locally and overseas.

I would expect the remaining holes sent for analysis to be back soon based on how RUM are now putting out information, and also beneficiation results and beneficiation method which will give us an idea of cost factors involved.

I have my fingers crossed that the Maiden Jorc Announcement July which will be "INDICATED" rather than "INFERRED".

I think we will be able to tell if it is going to be "Indicated" or "Inferred" by the diamond drill results which most likely will be released to the markets closer to a Jorc Announcement.

Anyway, these are just my thoughts after looking around the place. Maybe someone else has been doing some research and have started buying in. The Tree has had a very good shake that is for sure.

So for me it comes down to the following -

I would like to know -

"In Ground Volume"
"Beneficiation method to be used"
"Diamond Drill Results"
"Results under current Analysis" and
"NT Government approvals" and of course the long awaited JORC & NI43-101 Compliant Statement.

It will be interesting to work out what the price of Phosphate will be at the time of the JORC.

Price + IGV = $ value - Capex - Capop = $ viability = Customers = $ = Dividends.

Unless we get JV or T/O beforehand.

Glad I kept my shares and did not panic like some others. I am happy to hold still and possibly do a small buy in over the next few days.

I am looking forward to the next set of results, especially the Karinga Creek Project.

Thoughts welcomed fellow rum holders, um did I miss something? Did I read something into this that isn't there?

PS I am pleased for MAK holders if they get NMDC in a 50% stake in Mine Makers Ltd. They have been suffering a low SP for such a long time.

Best to all.