hang in there, page-5

Hi Slammer,

Let me answer there one by one. All IMO of course. 10 is the highest risk level.

-Lowish quality of resource?

You may think it is low, but it is actually more than acceptable. Many of its peers in fact, are mining lower quality ore. At the end of the day, the scoping study will reveal the economic model surrounding this. Even at a cost of circa $500M, the project will be more than economically viable. It's not just grade, it is the manner in which it is processed, those associated costs and the overall quantity - which is growing.

Risk - 2/10

-Difficulty of extraction due to depth/accessability/distance from processing infrastructure?

Again, this will be addressed in the scoping study. I was of the understanding that accessibility and distance were not issues and infrastructure was already being approved.

Risk - 3/10

-Sovreign Risk?

Risk - 5/10. This can never be discounted and can go to 1 on 1 day, and 10 on the next. Hence, the term sovereign risk. Mind you, having said that, the government of Zambia has been absolutely fantastic when it comes to supporting mining and concurrent tourism across the country and has much better tax / royalty scales than many other countries. So, on what i have seen, this is not an issue, but that can change any day. Australia itself, is not immune from this as we have seen in recent years with political factors now impacting more than ever on mining in many different ways.

-Copper price?

Risk - 9/10. This is the big one for me. I have not seen the scoping study, it is not yet complete, but it will make assumptions around the copper price for the next 15 years. When i see those assumptions, i will have a better idea if the model is too optimistic or can be achieved / beaten. Given they won't be producing for 18 months, who knows what will happen.

-Confidence in management?

Risk 3/10. I actually think the current CEO and Geo are good for the company. I don't know much of the other staff as many are actually in country locals. Things have gone wrong in the past, but things have also changed. I am invested not based on what has happened, but what I hope and expect will happen moving forward.

-Distance from end result (a producing mine)?

Risk 1/10. Don't see this as a big risk at all. I think the time frame is realistic for the yearly output they are expecting. 18 months from now is more than sufficient time to do the scoping study, built the plant and commence development. If they said 6 months, then I would know they were kidding themselves. Slippage is the norm. Expect it, but then be happy if they do it on time.

-Poor market sentiment?

Risk - Nil. I actually don't use market sentiment when doing a risk analysis for the simple reason that I cannot predict it and invest in companies for future performance, not what happens today. If someone can't see this is well undervalued, then they miss out. Someone else will see that and get on board. Fact is, the overall market sentiment has been poor and ZRL as a speccie, is not immune. As they look to move themselves away from the speccie status, sentiment will mean less and less.

all the best