My thoughts on what has encouraged (and in some parts excites...

My thoughts on what has encouraged (and in some parts excites me):

• Tom Revy is working really hard to reduce capital and operating costs. See "What Could This Mean?" slide (page 18 of pdf of announcement) as examples. I think we are getting great bang for our buck as he is adding so much more value than many well paid consultants engaged by previous management.
• The work on the Full dry comminution circuit will have a really big impact on capital and operating costs (and environmental approvals etc). Tom explained why this is possible - the way that the magnetite splits with the grain (giving a clean crystal without inclusions and impurities) and the absence of clay (which takes more water to process).
• The simplicity of the new process flow sheet and use of off the shelf pieces of equipment (reduces cost and risk compared to a bespoke processing circuit).
• The real standout to me is the by-product potential. If sounds like we have hematite that will add to the iron content of what is produced that has not been included (or possibly as a separate product). In addition, the silica sands has the potential to be much more significant. For those that did not get to listen to the AGM, there was discussion of this "by-product" being $100/t (or more) if the sand is of a certain type or that can be separated/extracted. This could be a real game changer for the NPV/IRR.
• That management believe that these changes can have such a material impact on the NPV of the project, that it is worth delaying negotiations with potential partners to ensure that the additional value is captured in those negotiations rather than giving away that value.

My thoughts on the risks and frustrations:

• That management are unable to provide clear answers (or broad ranges) on things like capital costs due to ASIC/ASX guidelines. My understanding of this is that because the mine plan would start with the shallow ore in the fold area and there is no JORC resource for that area, they are unable to make those statements that would normally be available to shareholders.
• That whilst I agree with the reasons for the delay in negotiations with strategic investors, that there are delays.
• That there is some uncertainty about whether the company will need to raise capital before completing a deal with strategic investors. However, Jeremy Kirkwood was open about this in discussions and is focussed on minimising dilution. Therefore, there will be plans put in place for such an event rather than something rushed and last minute.

My overall comment, is that if even half of what Tom has been working on is proven, there will be a significant impact on NPV and if all of it is proven, it will be a game changer (keep an eye out for announcements on by-products).