race to the finish line, page-40

Borisdog,

I have a question with respect to your last paagraph where you state:

'The good thing CUX has going for it is that the ore DOES have a simple method of mining, needs no grinding circuit and has a fairly simple method of concentration and has plenty of ore. Whether they have enough grade in the ground to economically mine, build a plant and treat it is debatable.'

I have been unsucessful in finding the reference to the cost/tonne of alluvium to mine and convert the alluvium to HMC but I believe I read it as estimated between $1.50 to $2.50/ tonne of alluvium. I think it was in the presentation made in Hong Kong.

The amount of alluvium to create the HMC is stated at 1 tonne of alluvium for 15 to 25kg of HMC with a grade of currently 6.25% TREO. This is achieved in field by wet processing.

So this works out at between 40 and 67 tonnes of alluvium needing to be mined to get the HMC. This works out at a cost of extracting the HMC of between $60 and $167 per tonne of HMC.

If you were comparing apples with apples you would need to compare the 6.25% with the Grades of TREO from other minines and I would suggest that this is somewhere between 1% to 3% TREO and the fact they are normally in rock. So for a comparison in costs you need to compare the cost of open pit mining between 2 and 6 times the amount of HMC and crushing that amount of ore to be comparable to get the same tonnage of TREO as in a tonnes of HMC from Charlie Creek.

The dry plant processing will then produce a concentrate but this will also require 2 to 6 times less material to produce a concentrate than a dry plant from other comparable rare earth resources. Therefore, it is suggested this plant could be substantially smaller for CUX resources than a plant for the dry plant processing for other rare earth resources.

If at the end of the dry plant processing of from other rare earth resources produces concentrates of >35% then the chemical processing would be the same as CUX's chemical processing costs.

Therefore, the way I see it is that the costs for CUX to produce a rare earth concentrate will be substantially less other rare earth resources because of the cost to mine the resources, the material needed to be processed to extract the concentrate and the lack of the requirement to substantially crush the ore.

Another aspect is the split of TREO between LREO and HREO and though not as high as NTU at 17% HREO is high compared to a substantial number of rare earth resources.

There is no doubt as to the size of CUX's resources and it has the potential to be one of the largest rare earth resources in the western world. I make this statement by multiplying the results of the < 5% estimated JORC resourcce by 20.

I don't think the grade is the most important aspect it will be the cost to create the HMC and the concentrate that will be the deciding factor.I don't believe that other rare earth miners will be able to mine and crush their resource for less than CUX. Then because of the material they will need to dry process they will not be able to do this for the same cost as CUX appreciate either.

I would appreciate your thoughts.

many thanks to all that have made genuine contributions because you have helped focus my thoughts.

Cheers