Ann: Quarterly Activities Report, page-20

Hi guys, good news, I got a response from our CEO (who spends a significant amount of time in Madagascar as a hands-on CEO), regarding my inquiry on the reasons behind the low price per tonne, and indeed he confirmed my suspicions : it was a "mixed" sale.

He referred me to the market release on the 29th of November “CEO AGM Presentation” where he outlined current concentrate sales (see Slide 12). You will see at the bottom of the table, on the left, a ‘Mixed' concentrate at <94% from 85% up to 94%. This was the bulk of the concentrates sold in the last quarter and hence as a mixed concentrate a lower pricing was achieved.

He expplained to me that the ‘Mixed’ is unfortunately how the previous owners sold their concentrates (last line of the left table, slide 12). He added that as part of Bass refurbishment the company is currently building and installing a new drying and packaging facility (see Slide 14) which will be capable of screening higher value concentrates (see Slide 10 & 12) and minimise future ‘mixed’ sales.

In other words, the optimized concentrate sales will be screened to different grades/sizes achieving higher average sales prices (see slide 12, the right table where it is mentioned the company will achieve up to super jumbo flakes +35 mesh (>500 microns) between 94% and 98% purity. After refurbishment the MINIMUM grade will be 94% and average grade 96%+.

Hope that helps,