Average Basket Prices

Hi guys,

Regarding Average Basket Prices, my understanding is that these are the prices :

Leucoxene 70 : Fixed Price off-take (350 US$/t)
Leucoxene 88 : Market Price off-take (80% of the price of Rutile)
Zircon Concentrate : Market Price off-take (46% of the price of premium zircon)

"Rutile" (95% titanium) is currently sold at 1100 US$/t and "Premium Zircon" Iluka reference price is currently at 1410 US$/t and Iluka just announced an increase to 1580 US$/t starting 1st october 2018.

Therefore, by Q4 2018 - Q1 2019 MZI should expect to receive the following US$ prices :

Leucoxene 70 :  350 US$/t
Leucoxene 88 : 880 US$/t
Zircon Concentrate : 727 US$/t

Given current US$/AU$ exchange rate (1.36) and targeted distribution of production (40% L88, 30% L70 and 30% Zircon concentrate) that would translate to a weighted average basket price of 675 US$/t or 911 AU$/t.

That is a huge improvement from the currently received Q2 2018 average price of 715 AU$/t.

Thanks to a tight Titanium/Zircon supply situation, increasing prices, favourable US$/AU$ exchange rate and decreasing costs per tonne, IMO margins will dramatically improve for MZI over the coming quarters. Good luck to all !