Project Engineering 101 - FEED, page-8

Hi Hotazel,
I think you have answered your own question now on why FEED but I would add my two cents (= 1 SDL share lol).

Firstly ,I am not saying FEED is not necessary for funding.

You would agree that things have changed a lot since the DFS in 20111. Different strategies to the Rail/Port may have evolved, maybe a revisit of overall scope allowances for future expansion that was built into the costs and now being removed to get project costs down, maybe different philosophy on the two mines, changes may be looked at the Port stockyard infrastructure, or changes to rail alignment to eliminate costly bridges, I don't know but this is all consistent with one of many things a FEED looks at.

The cost of construction and material supply has changed since 2011. The costing's would be stale and need to be updated and revised for current environment. That is why maybe only $40M is committed to the FEED.

The more you spend on engineering design BEFORE you commitment the better project results - Fact

Going back to Mongrels comment. Separate FEED's are done to update project estimates and scope if there a significant time period from previous FS or it is an activity that also applied Value Engineering (VE) to further reduce scope/capital intensity. FEED activities are compatible with the input requirements to a DFS.

The short and long of it is about better definition, mitigated risks and more certainty on the cost/schedule.
It is a good thing. The Financiers are in a much better position to sign-off on project.

When the FEED is completed in May (?) it would be expected to also deliver cost savings together with a further firming of estimate.