General comments/chat, page-22110

Sentiment has been hit hard so will take some strong newsflow to recover momentum.

I won't look at new valuations until after the DFS is released.

The quarterly gave some more info on what is planned. The new info here is that they seem to be planning to add a refining circuit into the process plant ( approach proposed in PFS was to DSO and then wet-processed ore toll-refine overseas ).



This is important for the following reasons:

1. Cost reductions in areas of shipping and processing which should allow for reduction in operating costs and hence increase in margins.
2. The company will have better control of consistency of product by refining on site ( particularly in the important commissioning stage and first year of production ) . I view this as lower risk than versus remote oversight of a toll refinery overseas in the commissioning phase ( due to travel restrictions ).
3. They have the forethought to design the plant for integration of plant upgrades later - e.g. after securing sales of higher margin products for Paints/Coatings, Concrete Rheology Modifier or feedstock for HPA
   • I also wonder if ore from Camel Lake would eventually be processed here ( tonnages transported would likely be small ) with further refining potentially done elsewhere.
   • They may plan to integrate these upgrades into the second processing module. So I think DFS will be focused on ceramics and then after the PFS studies for the other products are completed we will could see some of the production capacity for the second module diverted from ceramics to these higher-margin products.

From the PFS, highlighted below are the areas where we could see significant operating cost reductions:



Other opportunities to reduce costs could come from further optimisation of the mining stages.

I think main changes for PFS to DFS economics will be margin improvements for ceramics plus life of mine increase. These together would contribute most of the likely improvement in NPV.