Ann: Investor Presentation, page-13

The PMT study released today provides an insight to Canadian UG costs. that cost was C$68.7/t (US$52.2/t). If those costs were to apply to UG mining at Seymour is likely to put option 3 as the most likely candidate to emerge from the UG review.

North Seymour average grade was 8.3Mt @ 1.13% however some of the UG extension drilling was usefully above this. If you had 1.2% material being concentrated to SC5.5 with a 65% recovery rate then 7.1t of ore is needed for each ton of concentrate. If UG mining costs are US$52.2/t then UG has the potential to be providing a mining cost of US$373/t. When processing costs, G&A and logistics are added its still potentially sub US$800/t ore.

Open pit variants - costs of the deeper ore
GT1 supplied the drill and blast / load and haul numbers in their PEA. If mining material 200m deep, the ore increases from C$11.06/bcm to C$16.66/bcm. The waste material to surface cost increases from C$9.24/bcm to C$17.64/bcm. When the drill and blast is added these are C$19.4/bcm and C$20.38/bcm.

The density of pegmatite is about 2.7x while waste mafic rock is about 2.9x so the cost per ton is ~C$7.19/t and ~C$7.03/t. If mining 20:1 strip ratio material the cost estimate would be around C$147.79/t of ROM or at 0.75 to the USD US$110.84/t of ROM. This mining cost is more than double the UG estimate that PMT used in their PEA. This indicates that material at depths like 200m would be better to UG mine than open pit mine - if PMT's UG estimate applied to Seymour ore.

At 150m deep the strip ratio that corresponds with US$52.2/t ore is 10:1. If the marginal strip ratio where UG is potentially optimal is as low as this, GT1 could potentially be bringing back the PEA under option 3 with Seymour's open pit massively scaled back to a couple of years mining and mid-high single digit strip ratio. Because the PEA was open pit constrained, the addition of UG mining should also increase the resource. From diagrams it wasn't exactly clear where an option 3 pit boundary may lie, but I've had a crack at it in the diagram below.

I suspect that under a NDA TG6 has been able to share a draft of these workings with EcoPro and they realise the potential economics look sufficiently compelling they are interested in the ability to own up to 35% of the project. It may be dilution, but its better to have most of a project progressing to production than all of a project that is stalled.