Ann: Coburn Mineral Sands Project Zircon Concentrate Price, page-19

Hi Seals, I agree with you in that Fungoni will be mostly debt funded and that there will be minimal dilution. I really believe that this is strategic for Nedbank and that we will see them having someone involvement with Coburn funding.

What I'd like to see...some equity given up in the project for a quality partner in return for cash injection, similar to what was on offer in 2012. From memory, the earn in partner at the time (POSCO) was to take a minority stake of 40%. We were to retain majority 60% stake and would manage the project. Each party was entitled to its proportional share of production and would contribute its respective share of mine development expenditure. Material decisions would require the approval of both parties. POSCO were contributing $28 million of our share as a earn-in, to initiate the joint venture. They were to pay $7 million upfront, and then another $21 million, both going towards the 60% share of mine development costs.

Now, the question is, what is the "earn-in" worth in today's market especially after the project has been significantly improved with the recent DFS results. Sands market conditions are in a much better place than 2012. I still think that the earn-in percentage is fair and reasonable however the dollar value would need to increase in line with the DFS improvements I would say. At the time, with no runs on the board, it was a massive ask for David Harley to demand control of the project as an unproven operator. In my opinion, I think that this was the leading cause of the deal falling through. Now, fast forward 7 years, we are embarking on our first project as 100% owner and operator in Fungoni and the rest of the Tanzanian assets. All things going well, we would be heading into the Coburn venture as a proven operator, would we not?

Development capital for option 1 is ~$207 million. Our share of the capital costs under the 60/40 split would be ~$125 million. Could we achieve an earn-in price of $50-$60 million? With the remaining to be funded via debt solution? I assume at this point in time we would have some sort of free flowing cash flow from our Tanzanian assets.