Ann: Inside Briefing interview on Polar Sapphire acquisition, page-93

Hi David,

we inGermany are currently intensively discussing the quality of kaolin from thevarious HPA Juniors (Altech, FYI, PUA) in forums.

In other words:

> Which additives are typical for kaolin deposits? What percentage ofadmixture does a "contaminant" become critical on the cost side?
> What is PUA's position with regard to the quality of kaolin compared toAltech + FYI?
In regard to kaolin, I can only comment on the Yendon project.
We see our kaolin as having some very attractive attributes compared to theothers, mainly the ability for the silica and kaolin to be physically separatedat the mine site reducing the cost of logistics and the size of the processingfacility.
All of the kaolin projects benefit from the very efficient purificationprocess, so the real impact of impurities in the kaolin is in the capital andoperating costs of the purification process.

Thecomposition of the various kaolin deposits does not permit any generalisingstatement. PUA concentrates on its own deposits (foreign "buildingsites" are politely not commented on - imo).
The ability to separate silicate and kaolin on site reduces PUA's process costs(storage/transport) and allows a smaller production facility. Whether thisdiffers from the competitors - n. i.
Basically, the proven process technology (BAYER process?) benefits allkaolin-based HPA projects. However, the intensity/effort of this processdepends on the degree of contamination.
I would have liked more "meat on the bone" in his last sentence. Butthe question could also touch on business secrets.

> Howhigh can the additional costs for the production of 4N or 5N increase?

I can’t comment on theadditional cost to go from 4N to 5N for the kaolin process. We didn’t look atthat on a commercial scale for Yendon as the Polar process was already making5N.

Polar Sapphirehas already produced HPA from 3N - 5N. However, it appears that there are plansto concentrate exclusively on the production of 5N.

> Whenis the next HPA sale of Sapphire expected? Is continuous production planned?

Assuming completion ofthe acquisition of Polar Sapphire, the plan is to develop the 1,000 tpa processfacility and operate it on an ongoing commercial basis.

Imo will mainly use the pilot plant in Canada for further research &development, a regular commercial production of 5N does not seem to be planned.