valuation

Valuation by Patersons...
We are confident NTU will be able to be in production in 2015 despite a JORC compliant
resource not being defined. This is due to the simple processing flow sheet, relatively low
capital requirement and the superior product NTU will produce in terms of concentration
grade and REE distribution. Drilling to date has identified a number of shallow deposits for
open cut mining.
Bateman Engineering has completed a desktop capital study estimate of $89M +/- 35%.
We have assumed $120M as the estimated capital requirement (scoping study 90M plus
maximum variance of 35%). This is for ROM of 500ktpa with a head grade of 0.75% TREO.
This will produce 8.5Ktpa of concentrate, containing 35% of Rare Earth Oxide or 3kt. We
view this as a very conservative estimate of the ore grade considering the drill results
released to date. We have used NTU’s recent guidance on the milling costs, assumed a strip
ratio of 4:1 and trucking the concentrate to Wyndham to be shipped, we estimate operating
costs to be $4.68/kg of concentrate or $95/t of ore processed. Any increase in the TREO
head grade will have a significant downward impact on the operating costs.