A typically confident and reassuring webcast from Bruce, he...

A typically confident and reassuring webcast from Bruce, he really is all over the min sand business. I'm a big fan of the understated, walk quietly but carry a big stick management style... too much of the pulpit thumping seppo style, or pure BS you can't be serious style, just makes me wonder what's really going on.

Well, Bruce read the room correctly imo and came clean in a matter-of-fact manner that the OS issue turned to sheet despite our best efforts and now it's up to the geology gods and engineering geniuses as to how things land. Dec Qtrly and webcast, given it was early days Bruce rightly played it cool that "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." Turns out there was and badly, in the first couple of pits anyway.

So how can Bruce be a good MD after he played down bad OS problems he knew about end Jan, but then casually confessed end Apr that OS may be a permanent issue that drops expected sand to WCP to just 75% of expectations? As @Franpower put it to another poster while back, "If you call heads and it comes up, it doesn't make you right, it makes you lucky". Bruce called heads when there was enough doubt and time to rectify the issue somewhat, unfortunately it landed tails and that made him unlucky. Good MDs don;t needlessly panic the horses too early when it might work out OK, which requires glass half full approach. The problem for some investors is hearing the glass described as half full and in their one-eyed enthusiasm seeing the glass as already full...

If the DMU gets stuck at 75% of expected undersize throughput to the WCP then the mine is in a spot of bother to say the least. At TBs best in the first 4 years the DFS had a revenuep-cost of <2:1. If 25% of the revenue is lost to 25% lower production, and costs rise 25% from DFS as they probably have, then at best op-cost is covered but you still go broke. If the DMU gets stuck at 75% USize, then TB will need another DMU to run the WCP at full capacity, which lifts the revenue but increases opex. Without being kissed on the deck with some unexpected upgrade to balance the loss out, i don;t believe TB will be much value stuck at 75% DMU to the WCP.

Fortunately, a very substantial HM overcall appears to have done just that. Higher recoveries of VHM to product has lifted that OS driven 25% fall in production up to 85%. The maths goes... 100 x 0.75 x 1.13 = 0.85, so 13% more Ilm and Zir have reported to the final product than expected from the DFS for that grade to lift 75% to 85%. That's what i call a full-throated kiss...

The explanation given to date is that the induration (OS, cementing of sand grains) is preferably situated in the low-HM quartz rich sand beds not the HM-rich beds, such that more HM is liberated to lower amounts of undersize after screening off the OS. I thought it unlikely, but it's possible on a micro scale that silca/carbonate cement preferably attached to the silica rick laminated beds due to chemical conditions more suitable than within the HM rich beds (eg pH levels?). There are a few other explanations, like THM and/or Ilm/Zir VHM is simply under-reported in the geological model here and mine reconciliation hasn;t picked up, but I'm leaning towards HM being under-reported from the drill bit on account of OS being under-reported from grinding actions of the aircore bit during drilling.

Bruce explained this effect in the webcast. Say the induration is more heavily formed in the low-HM beds, and the drill bit under-reports OS, thus the OS is higher in mining reality (as reported) but the HM that was 'diluted' with more drill bit generated OS is actually higher when the low-HM material is taken out. I've tried spreadsheeting higher recoveries to get 85% net product, but it just doesn't work at 13.6% THM without unrealistic jump in recoveries imo. I know it's crazy but this bizarre and huge jump in HM grade vs prediction might actually be real and one of those rare examples of good fortune saving another failed mine development.

Before we get carried away, this HM overcall has to be just as persistent and bankable as the OS problems are bankruptable... An interesting ramp-up to follow, especially given it's happening so soon on the heels of Coburns failure of predicting production issues.

GLTAH