Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-13

For those that are worried about grade in any of Hammer's copper deposits I suggest a look at the work Caravel is doing on its Definitive feasibility study on the Caravel copper project. I am also a bit old school and like to see high copper grade above 1% however many large mines around the world operate on far lower grades. There is always a trade off between tonnage and grade, lower grade you need more tonnes to get economies of scale to make things profitable and lower tonnes you need higher grade to deal with the higher mining costs and lesser economies of scale.

Caravel is 150km NE of Perth. They are working on 25+ years producing 65,000tpa copper and 900tpa molybdenum. The astonishing part is that they believe the economics work on a 1.18 billion tonne orebody grading only 0.24% copper (over 2Mt Cu in ground). They are looking at 30Mtpa processing with a molybdenum circuit as well as the copper. Capex: AUD$1.7 billion. AISC US$2.07/lb. Payback 4.9 years.

I am not an investor in Caravel and 0.24% Cu does not work for me because I would feel very vulnerable to copper price fluctuations but it shows how far the grade curve of the worlds copper mines has shifted and the low grade starting point the industry is beginning to consider.

What this does do is put a focus on Hammer's long intersections of 0.3-0.8% copper at the Neptune prospects-Lady Rose area. Hammer have quite a portfolio of longer low grade copper intersections the sit well above the 0.24% Caravel are working on. Is there a possible lower grade bulk tonnage project out there that a review of Hammer's drilling and tenements might identify?

I am not in any way suggesting Hammer can get the tonnage up to the same order of magnitude as Caravel, I just don't see this. Mt Isa copper was around 230-300Mt at 3% Cu from memory.

DYOR Not investment advice.