Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-19

Bless Franpower, typically diplomatic, optimistic and willing to place great store in parsing management's commentary...

Starting 31.30 min mark, BG provides a long dissembling response to the issue of oversize, indicating OS is or no real importance while detailing the efforts to map it with dense infill drilling, and trial remote testing OS mapping in the future for even better OS mapping and mine planning. He says that the DMU can handle the OS no worries, but then also how important it is not to overload the DMU and lose lots of HM in the undersize fraction...

BG "doesn't believe it's the case" that more OS means losing more VHM in the undersize, "but like everything else regards grade and reconciliation it's still early days"... Taken in totality, my read on BGs commentary is that they are doing what was expected during ramp up, which is managing and fine tuning the mining of oversize while monitoring it's critical impact on recoveries and reconciliation. Reconciliation is the process of comparing actual production against planned production, and methodically explaining where and why discrepancies between the mine plan and outcome might vary.

"seeing nothing there that suggests we've got this wrong and that there is something going on in the orebody that we didn't expect."... doesn't mean that OS isn't proving more problematic or taking longer to refine mining methodologies than hoped.

"We continue to observe that in areas with oversize that the valuable mineral in the undersize fraction still reports to what should be contained in the total fraction (ie, not much VHM contained in the oversize and therefore effective grade in the non-oversize remains inline with forecast)."... paraphrased by Franpower, this somewhat mis-represents the reality and risk of induration and oversize. Induration that cements grains together, often with iron-oxide contamination turns VHM into trash. Induration is an over-printing alteration on the primary sand unit that downgrades VHM to trash... and so the more induration present the more in-situ HM is either rejected as OS or is rejected as trash in the dry plant.

It's good that BG isn;t spreading concern about the induration and possible low recoveries during the early ramp-up phase, but let's not downplay the risk or reality. From GLOBAL MINING RESEARCH 5th June, 2023:

"Mining at Thunderbird is not a traditional mineral sands operation, which reflects that the deposit is both old and fine grained. The age of the deposit is reflected in that the mineralisation is not completely free flowing and includes patchy zones of induration near the surface (first 10-12m). In terms of oversize material this is estimated in the resource at 12% of the material.

As part of project reviews two trial mining studies were conducted. These trialled mining by both dozer rip/push and continuous miners (used in the iron ore sector). Interestingly in terms of produced fine screen material it was found that both approaches yielded similar results. Dozer rip/push was selected as the preferred method given its lower operating cost. As a result of the tests, it was decided to use larger equipment (D11 vs D9 dozers), to change the site of initial mining, and increase the volume of initial pre-stripping."

"Following two trial mining programmes, the starter pit was actually moved some 1.25km to avoid the harder material. This resulted in a
higher strip ratio in the early stage of mining, but with significantly less mining and processing risk" (Bridge Street Capital, Aug 23).... Photos below show how even the 'friable' sand that represents the under-size fraction with VHM is mildly indurated (ie blocky) rather than free-flowing as per traditional min sand deposits. This is largely on account of TB being much older than typical (ie 100M years old sand at TB, not <100k or even <1000 years elsewhere).


Back to the issue I raised of lower recoveries than expected Years 1, 2 & 3. I just checked SFX release Jan'24 photo against Sentinel Satellite imagery 3rd Jan and it looks the same, so fwiw let's assume it reflects the HMC stocks unprocessed into final products.


Visually and from some rough maths, it looks like 5kt of HMC stocks on Dec 31st, and another 5kt non-spec con unprocessed. Adding in 10kt of HMC to the final product tonnes and on 740kt ore @ 13.3% HM and I get ~45% recovery of HM to final products based on 12% HM losses from dry plant upgrade processes. Yes a bit rough, but not so rough it could actually be 55% recovery as per Year 1 DFS plan. And I would expect some ramp up from 45% to 55% to 65% or whatever over time as the plant is fine-tuned and ultimately the pit moves under the upper induration layer influence.

So as BG says... "We're seeing nothing there that suggests we've got this wrong and that there is something going on in the orebody that we didn't expect.", but that doesn;t mean it's running at nameplate recovery or there haven;t been lower than planned recoveries, even in the new, deeper, less indurated starter pit location. With grade control drilling providing a better idea of where induration is thicker/heavier than usual, I also expect they will steer towards the lower indurated areas during Year 1 to maximise their chances of ramp-up success and making bank (unlike STA). Whatever transpires, BG is confident enough to start reporting all the facts from Jan 1st, not just some selected figures, so we will all know exactly how the mine is progressing against the mine plan...

GLTAH