Ann: RFR sees 42% Increase in Measured and Indicated Resources, page-35

Sorry about the late response. Just have personal commitments taking away time from being as present via the socials. Would also recommend using the @ tagging function. I don't always read every comment to see if i've been mentioned casually for responses.

The upgrade in resource was slightly lower than expected, but by no means a disappointing results in terms of the intention.

As was already pointed out the MTU is a tungsten concentrate. A solid 1kg tungsten bar is worth around $45USD/kg = 45,000USD/t - Which is actually 720M in ground value.

If people review the PFS is was based on probable/proven reserves of 4.6mT @ .148% W03 = 6800T of contained tungsten. Noting the reserves are a smaller component than the JORC resources.

So now it's really about how much of our measured and indicated resources converts to reserves. Previously 6.14mt mean 4.6mt. = 75% converted. If we get a similar portion converted we may end up with ~7.5mT in reserves.

Also note that the PFS used measured indicated and 19% inferred total of around 6.3mT. now at close to 10mT. Theoretically i think they will add around 3 or maybe a touch more to the mine life. Maybe 8-9Y total.

PFS was 117M USD LoM at $240/mtu USD.
therefore that's 487,000 mtu produced.
Annually around 97,500T (average).

Using the same production figures and applying current pricing $300/mtu (noting spot is actually $310/mtu).
Then annual tpa 97500 x 300 = 30M USD annual revenue.
Annual opex = 116/mtu x 97500 = 11.3m opex
Annual profit at current pricing would be 30M-11.3M = 18.7M pre-tax.
Assume same tax rate (LoM 29M post tax/37.8m pre tax) ~25%
Therefore new annual post tax cashflow 18.7M Pre tax x .75 = 14M USD.
New LoM = 8-9Y = 118M USD LOM post-tax profit.

I'm going to factor 20% of error down in my calcs and go with 100M USD LoM post-tax profit.

With 7M usd capex discount rate of 8% and 9Y LoM with 11M USD post tax profit annually I arrived at a 62M USD post-tax profit.

That's almost 3 times higher than the PFS.

So yeah, i'll let the market do what it wants to do in terms of expectations etc, but project is still a buy from me and I had orders hit in the low 8's so no i'm not selling i'm buying. We have 40mT exploration target so what we can prove on paper for input into the study is kind of irrelevant. There's a much larger LoM which is fairly important in NPV terms - so if the market will sell down by what's proven on paper i'm happy to be the buyer. This looks pretty certain to get offtakes and with only 7M capex required again it increases likelihood of securing it.

20-25% MC to post tax NPV is a pretty good place to be when it looks highly likely to obtain. Usually for plays with a high chance of production I'd go as high as 50% MC-> post tax NPV whereby in production you're close to 100% or as I've stated before market tends to move to PE ratio based on earning not necessarily NPV. (others disagree, that's fine). That's 4-5 times upside from here to production - noting we are mining through our pilot plant in September.

"First production of ore taken from underground (UG) stockpiles2 remains on track for pilot plant processing in September. In recognition of the improved tungsten prices and being a fully permitted operation, RFR is planning to take the underground development through to full scale commercial operation as soon as possible. This will involve further resource studies, including drilling to convert and expand the current high-grade UG resource."

Given they announced a transition to full scale commercial operations from the underground component and have substantively increased the presentable economics for open pit methodology i was surprised at the sell off, but then again this is the ASX and generally people don't understand what they're doing. Time will tell whether buying some more at these prices was smart. I think it is given the aforementioned. I've then end up in commercial open-pit production pumping our the revenues/profits indicated then it definitely will be.

SF2TH