Future Cashflow & Rerate!!! ( cashflow projection @ 12 September 2017 ), page-4

Note some of the work put into the statistical analysis. Whilst based on guesses the guesses are certainly underpinned by research ...

• I joined a Gem Society
• I e-mailed/messaged individuals in the industry to get some perspectives on rough ruby and cut ruby value
• Significant research of ruby material on the web covering Mozambique and Burma
• I researched yields for cut rubies from rough rubies
• I carefully analysed all the company announcements to get a good understanding of the carat size distributions of rough rubies. Some contributors here suggested statistical distributions that might accurately model actual distributions.
• I researched 3 or 4 ruby grading systems
• I carefully analysed all the company announcements to get a good understanding of ruby sizes and qualities being recovered
• I obtained industry price data for cut rubies at a range of sizes and qualities ( industry data sourced from a company announcement )
• I used the research above to develop estimates of reserve price ratios

In the absence of any definitive data it is easily the most carefully put together estimate we have.

$300/ct or $600/ct would be optimistic. Last week I would have agreed with a lower range around $180/ct.

$200/ct is reasonable given the company focus on secondary deposits that yield 'almost exclusively' high quality rubies.

If you look at the 3 pie charts (below) in the statistical analysis, you will see that the first 120,000 carats (1st chart below) of inventory includes a very high proportion of commercial quality ruby so there is a reasonable distribution of qualities in line with recoveries that could be expected from . The assumptions IMO are reasonable.


These are the breakdowns inventory-wide for auction 1. IMO reasonable given company focus on secondary deposits.



This will also achieve the company objective of providing sufficient commercial-quality material at the auction to meet buyer needs. i.e. 1/3rd of inventory.