Ann: Quarterly Activities and Cashflow Report, page-37

Coburns exploration potential is zero, but the Amy Nth resource that was excluded from environmental permitting and the mine lease is the 'extension case' upside that STA have been hanging their hat on. Amy Nth was excluded primarily because the EPA had concerns about water mounding causing damage to vegetation outside the mine path. Obviously STA haven't yet set the EPA minds at ease regards water mounding risks so far...

If it turns out Coburn is simply uneconomic (not operating cashflow positive) then it will not be bought by anyone except selvedge value of the plant, less C&M and rehabilitation costs, +/- a very cheap min sand price up-cycle option. Maybe BSE could pull down and ship some of the plant and equipment to Madagascar and save some money given Toliara is a similar low-slimes, high tonnage operation? Maybe IMA could to Yandanooka, but that is as low grade as Coburn. If Coburn can generate cash but not carry debt, then it will go into administration and keep operating. Either way STA shareholders will be wiped out, unless it can generate enough free cash to repay debt.

Tanzania assets... fungoni is very small and probably not worth developing unless min sand prices stay high. Tajari and others are bigger, not great grade, but big enough economies of scale should make money 'in the right price environment'... are we heading into the right price environment and supply shortage to carry a only modestly profitable new mine in Tanzania? I think not unfortunately, and there are better deposits like Toliara lining up to come on with much higher revenue-to-cash costs ratios and ROI's.

One of my knocks on the Tanzania assets is the onerous 16% free-carried plus 5% royalty plus other corp tax, WHtax to mine in Tanzania. Luke got stitched up for $15M comp and re-location to locals on Fungoni long before any updated DFS let alone decision to mine had been made. Africa risk doesn;t gel with high taxes, free carry etc unless the deposit is proportionally better than western mines. Base have a perfect plant for Tajari just across the border in Kenya, but is there enough value in Tajari for both STA and BSE to get a sufficient risk-reward feed from it? I think probably not.