It's an interesting quarterly, that's for sure.Just some of my...

It's an interesting quarterly, that's for sure.

Just some of my comments regarding it.

Outetec at their cost are putting in additional four dry mill separators. Going by the pictures that I've seen in past material, that totals twelve and tells me that the issues they have encountered have revolved around extraction of the high grade. For a plant with a throughput of only 1-1.5 million tonnes, to need this is like putting an A380 engine in a Daewoo Matiz.

They also talk about higher recovery rates within the wet-mill, defintely changes there, but no picture - that I would like to have seen.

The quarterly mentions that product levels have improved in the wet and dry mill as a result of these additions and further plant modifications. I would be guessing that management would have done bench testing on the waste material and noticed the recovery rate was way off, they would be livered that such an extensive change was required. Each electostat is worth about $450k and could you imagine the Outetec engineering boys telling their bosses they need another four, plus another couple of $ million for modifications (ouch).

Management mention that they will hit name-plate in the second quarter, so let's hope this is the case, because shareholders need a dose of good news. It's good to see a picture of the zircon circuit and also knowing that it's completely forward sold for 2012. I'm guessing that the recovery rate issues also affected the zircon circuit and with it increasing, more output will be following and easily sold.

Exploration
This I found funny.
Judge Coffin's judgement was in favour of Kimberly Clark (land owner) and ORC to continue exploration on the 465 acres adjoining to ORC's lease area.

The judge actually said the argument put foward by the plaintiff was "absurd". Could you imagine the judge saying that in a court room.

Litigation
Another joke and will be thrown out for the 3rd time, actually it could be the 4th (I've lost count). This will go on, quite possibly forever. It's at a point where the 9th circuit won't even set a court date and they would be growing very tired of this, but hey -welcome to the U.S.

Marketing
No rocket scientist to work out that the mineral sands game is no different to other resources. It has slowed, but very interesting to note is that Iluka have complete control of the zircon market and have reduced output rather than flood the market and damage the price. Some of the South African chromite (metallurgical) miners are closing down (for good), mainly due to power costs and in the long term will only benefit IDM.

I'm not surprised that the South Africans have flooded the European market with their metallurgicaul grade (low grade), with the slow down of stainless in china, but Spherichrome is a completely different. All of it's attributes are similar to Zircon, but it's now about the foundries understanding this and testing it. Management have said "ORC is now moving noteworthy volumes of Spherichrome and Hi Iron Ilmenite for testing". Let's hope the foundries respond and starting buying. I have a fair amount of confidence that this is the case, I just remind myself that both Sentient and Mac Bank can see the picture better than us, and they were more than willing to pick up the slack with the rights issue.

Corporate
They are burning the coin that shareholders have given them, but it won't take much for this project to get to break-even status especially with increased recovery rates within the zircon unit. I also think that HA and Possehl will come to the party, it's in their best interests to see this product succeed, because they will make a squillion from it, for a very long time.

Pep