Ann: Interim Phase 2 Metallurgy Green Lights Sybella REO, page-8

Agree with that take. It looks like the project is shaping up to be a high tonnage 20 mtpa+ coarse crush heap leach. Similar parameters to the Morenci and Escondida examples, but going after REE.

Big wins:
1. The granite is leachable with coarse crushing to 10mm and 15mm. My cost modelling has asssumed 4mm with HPGR so this is a reduction in OPEX and CAPEX by avoiding using HPGR fine crushing. They could also get away with coarser crush sizes, as Morenci being granite hosted achieved >80% Cu extraction with a whopping 40 mm crush.
2. The granite is very soft and soft = low crushing and mining OPEX compared to peers (e.g. Apollo Hill as a cost basis)
3. Very surprisingly, the rare earths leach at pH 3! Need to find out the maximum REO extraction at pH 3.
4. Weathered material achieves very high Nd/Pr and Dy/Tb extractions with modest acid useage. Better parameters achieved in the 0-20m section than I have used in my modelling. Note that the average acid consumption rate in the phase 1 work was 37 kg/t, whilst this interim Phase 2 work now has that at 20 kg/t with slightly higher REO extractions by trimming the acid concentration down by half and giving it more time.

Next big items to check off IMO are:
- Can a saleable MREC be produced with minimal REO losses? This will answer the question around whether the impurities in the weathered with the pH 1-2 leaching setpoints are tolerable.
- Prove up the scale and continuity of the resource to support modelling a 20 mtpa+ throughput case. Hopefully we get step out drill results back shortly.

Using a coarse crush heap leach, this project will easily have the lowest capital intensity per unit NdPr produced of any rare earths project. I think the Apollo Hill estimate of $300m for 10 mtpa is probably looking conservative now given we are avoiding HPGR and proximity to Mt Isa (no FIFO camp, power generation). Then scale up to 20 mtpa and use a 0.7 scale up factor and the CAPEX will be circa $500m AUD. If you assume they recover 300 g/t NdPr equivalent, that is around 6k tpa NdPr equivalent in MREC. For comparison, ARU has a capital intensity of $1,400m AUD to produce 4,400 tpa NdPr, or 3x higher capital intensity (allowing for the MREC discount for Sybella).