My broker caught up with MAK mgmt yesterday. Here are the...

My broker caught up with MAK mgmt yesterday. Here are the takeaways:

1) MAK believe they will delineate ~30mt DSO ore at Arruwurra (enought for first 7 years of Stage 1) in the next resource upgrade (April). This JORC resource will have the following metallurgy:
- P2O5 30%-32%
- Fe ~13%
- Al2O3 2%-3%
- U <10ppm
- Cd <5ppm

2) Arruwurra marketing has commenced. Product samples have been sent to 8 potential customers around the world (Indonesia, Philippines, India, China, Nth America I think). IMPORTANTLY: The Arruwurra product spec was better in every metallurgical way than each of the 8 potential buyers spec sheet... so MAK have absolutely no concerns about the metallurgy of the DSO product and whether or not it will meet buyers specs. Main zone not sure though, but I guess that is why it will be a beneficiated product, not DSO.

3) MAK in Canada for 2-3 weeks after Dubai conference for two main reasons.
i) Meetings have been arranged with the worlds major fertilizer groups (Agricorp, Potash Corp of Sask and Mosaic amongst others), as well as other potential investors.
ii) MAK investigating the benefits of dual listing on the TSX. Benefit would be greater exposure to the agri-savvy Nth American mkts/investors.

4) Concerning capex, MAK are 100% aware and investigating the option of forward sales contracts for a period of X years, to cover some/all of the capex required for DSO stage 1. No exact terms defined yet, as product specs have only just been sent to possible customers. Other options being considered would be bringing in a cornerstone investor (like a Mosaic, IFFCO etc etc) for either project or company equity, however, aware of the dilution that would create at these levels, and leaning much more towards fwd sales contracts to minimise/eliminate dilution.

5) Initial indications of demand for DSO product are something like this, however was only 99% certain:
- 1mtpa Indonesia
- 500ktpa Philippines
- 1mtpa India
- 2mtpa China
..... so no concerns about selling stage 1 product. Looking to announce offtake agreements by May at the latest.

6) Looking to expedite the permitting process for Arruwurra, as this is the only hurdle (assuming offtake, capex etc is sourced as per current timetable) from preventing production in Q4 2009. Apparently they are now dealing with the NT Minister for Mines directly, who is well aware of the potential cash cow and simplicity that the Wonorah project represents.

7) Estimates that freight costs (from initial scoping study) could reduce by as much as 15% due to Oil price, giving opex of ~USD$80/tonne, which is also what MAK mgmt now claim is the Moroccans cost of production... yet to substantiate this though.

8) Current data says RP still being traded @ USD$220/t - USD$250/t.


Apparently the Dubai presentation will be released today... no steak knives.