Ann: Sulphur Springs Off-take, Financing and Permitting Update, page-4

I was going to post some thoughts on the yesterday's Ann but I guess anything I say now seems a bit redundant in light of this mornings CR.

My read, FWIW, is:

EPA... typical delay and ineptitude of the EPA asking for more information that could have been requested back in July 18. Typical 3 months delay each time the EPA get's around to looking at a company's applications and proposals, then no desire to expedite matters for the projects ultimately driving the economy and taxes they live off, no effort or accountability for getting things right the first time, no care, no responsibility. Seen it time and again. This is the same mob who came out last week with a unilateral decision to shoot WA oil, gas and mining projects in the foot with a ruling that WA will "go it alone to save the world" requiring mining projects have to be carbon neutral... WFT? That sort of ideological, political, economic vandalism pretty much tells you what industry has to deal with. In short, nothing serious that will prevent the approvals being issued, just more delays.

Toho.... to say that Toho did not have the SS zinc in their current smelting plans is an understatement. Bought the off-takes rights before 2011 before Panorama was purchased by VXR, long time coming lol. It does suggest that Toho does not have an off-take equity deal on the table for VXR, otherwise it makes no sense giving VXR ammunition for competitive tension against other bidders. Disappointing in the sense that Toho was one obvious potential partner, positive in the sense that other parties are obviously interested and will be even more interested in offering VXR a good deal if they can get their hands on zinc con early rather than later. An extra 30,000t of con is a small price to pay for Toho to shift their off-take back 5 years. wouldn't have happened if they didn't already have enough zinc in their forward plans IMO.

Independent Technical Review... obviously good that no fatal flaw was found, as it shouldn't be. What small issues or adjustments to the DFS the IE recommended the banks consider we don't know, hopefully nothing that significantly effects the DFS value or confidence that it will comfortably be able to repay a high level of debt.

Project Manager appointed... If VXR was seriously going to fund and start development of SS this year then a PM was obviously required and earlier the better. An extra few months salary onto corp costs is not here nor there.

As proven to some extent from today's CR Ann, the EPA has slipped somewhat and management don't feel that a total funding package deal in the short term is possible, otherwise why go for a small raise now right? However, slippage is all and even then the EPA approval looks to be a condition that will not prevent in principal binding agreements subject to EPA approval from going ahead. Nothing to be happy about but fundamentally nothing to be concerned about either. Waiting with baited breath to see what these guys are up to with the CR.

Good luck