Ann: Volt to Launch Capital Raising, page-281

Hi Sunset just looking at VRC revised start up strategy for 20,000 TPA it needs to be stress tested for the current start forecast prices being canvassed to achieve financing. The new strategy that VRC have indicated must be warranted or they would not have confirmed a strategy change. One would presumably assume the strategy change is due to lack of demand during start up years.

(Start up first then expansion)While assumptions are made the need for general discussion surrounding distribution and subsequent basket price should be canvassed further.

To be viable it needs to be competitive with (peers & China)and hence to be competitive for product sales to become viable so please consider this as discussion not to cross promote as some will appreciate.

VRC best basket price from Namangale 3 used this in example under a stress test applied for start up and presentation towards funding. A competitor pertinently applied these prices to deliver a basket base pricing at $1534 which demonstrates viability in a saturated market while VRC best of 3 which comes to $859.5 under the same stress test.(Namangale 3) Which of the 3 that is to be discretely mined is unknown. This is some $1100 less than the $2032 from Namangale 3.





VRC start up

1700 TPD processed thru plant.

1700 TPD x 300 days of operation x Grade at highest possible 6% discrete zone

1700 TPD x 300 days @ 92 % efficiency rate x 6% grade @ 98 % recovery = TPA

27,588 TPA sale-able concentrate at $1594= $44 Million rounded

Stress test

TPA

1700 TPD x 300 days @ 92% efficiency x 4.4% grade @ 85% recovery= TPA

17.548 TPA x stress test basket price from best Namangale 3 @ 859.5 per tonne

15 million per annum less ROM per tonne ??

Grade is king in flotation technology and the more high feed grade at surface with premium flake distribution you have the better the economics for start up.


Mitigate the risk...higher grade = lower capex lower ROM better economics more tonne delivered per tonnes mined.

Distribution with larger flake mix = better basket price

Currently VRC key objective is to confirm stage 1 has a viable solution on start up for 20,000 TPA. The metrics change considerably with a small start up project compared to a previous economy of scale project where low grade was not such an issue.

Croc