Schadenfreude and Binary Outcomes, page-19

Quite right Peppie, test pits have been done, costs included. You referred to bmwgirl still running the ripping issue problems on this thread? I can't see those posts sorry, thanks for correcting those claims, I shouldn;t be surprised to see more posts here after the day MRQ had. I advise SFX holders to read the Thunderbird BFS and ignore more of that incorrect and baseless opinion. Lenders have run 2 years of due diligence and are happy to lend at very high gearing levels for a mineral sand project which speaks volumes for their comfort with the projects technical risks and profitability. Overburden etc is all included in the DFS NPV of ~1$B post-tax, very profitable.

As per the chart below, after including all the ripping (lol) and overburden Thunderbird has an industry leading revenue to cost ratio, much higher than some other Mozambique projects are trending towards.



SFX is a zircon driven project and Iluka does not want the competition is the simplest explanation for why SFX have taken so long to find partner funding. Once Iluka decided they would try and maintain their zircon sales without partnering SFX then gloves were off and statements made that the world doesn't need TB, we'll bridge the pending supply gap ourselves. Not the first time a incumbent majors have tried to scare off new competition, and it makes would be partners nervous. IMO opinion TB is superior to everything else Iluka is contemplating and the supply deficit is coming in a few years when J-A runs out. Once up and running Iluka will have some hard choices to make.

Lots of ducks have to line up for a funding deal of all new min sand entrants, just ask STA which have been trying since 2014 when their last Sth Korean partner for the project, Posco, walked away. True I didn;t appreciate how difficult and ruthless the mineral sands industry is but I do now. Top give you an idea how tightly controlled by a few majors it is just look at the following pie charts.





These guys don't let you in unless they have to, and they don;t buy you out unless you are on your knees at a discount. Please show me the last mineral sand project that was sold not for a huge discount to value (ie Eramet (TiZir) paid less than contributed equity for Grande Cote, Iluka paid less than contributed equity for Sierra Leonne except even then it was too much).

East African explorers who think that one of the majors or Chinese will just swoop in with a fair value acquisition are dreaming. RIO and Tronox I doubt will ever be interested having other exploration projects on the go, and Iluka is not a chloride slag producer. The Chinese will wait until Corrdior 1 has had a Stage 3 expansion before looking for new projects, which given the Chinese owner is broke and in default on their huge debt might be a very long time. The entire market is not without knowledge of the mineral sands industry as we saw today. SFX is a high quality project but struggling to break in against rumours and trash talk. Other below average exploration project's may sit on the shelf for decades, used as value trap to keep issuing shares and raising capital for the board to run around trying to find something else that works.

It's a tough game developing new min sand projects is the clear point here. I believe SFX will get funding, even if it is sold down on disappointing terms to what many were expecting a year ago. Once up and running we'll see if SFX are allowed to become another independent player or Iluka eventually move to return the comfortable oligopoly.