Ann: Great White Kaolin Project - Definitive Feasibility Study, page-430

Based on the DFS metrics as they stand, I do believe we were heavily oversold yesterday. At a pre-tax NPV of $613m (17% drop versus the PFS), I believe we should be sitting between 13c - 15c in the short term to be 'fairly' valued. At 15c, we're approaching 75% MC/NPV, which to me would be the upper end of the valuation. In EBITDA terms it looks even better (on the assumption we succeed and become a producer, which I believe we will), but for now I'd suspect the market will consider NPV first and foremost.

However, this valuation doesn't take into account the way investors have been mislead here, myself included. I expected an NPV equal to or better than the PFS, and JM has at times alluded to this himself. IRR I expected to drop, my own modelling suggested a 40%-50% IRR (which for any project is strong), however the fact we have dropped 79% in our IRR again shines a light on the PFS, this was not what the market was expecting. I was questioning my ability at modelling a project of this complexity, where in reality I should have listened to the figures.

The fact this DFS was released during trading hours makes it worse, I personally work a busy job so couldn't log on until we were already down 35%. I've just a set a stop loss across my entire portfolio, I would have sold at 14c yesterday if I'd had the chance. In the short term I think we'll see a recovery, no doubt there is value here for a long term hold, but the combination of lower NPV, lower IRR, 4.6 year longer payback, and uncertainty around our existing offtake agreements make me very nervous. I've held since 5c, and did very well with MEP, but I'm not looking to give it all back because I trusted the words of JM. I understand why he pulled a 12 hour shift to review the numbers, no doubt it was because the result was far below what his exuberance would have validated. But the fact they reached that conclusion so late in the piece makes me even more concerned. Hopefully the new office space includes a desk for some more analysts and PR advisors.

Sorry for the rant, needed to get some of that off my chest.