Ann: Trading Halt, page-27

The issue with any base metals concentrates will be the recovery of the base metals and whether the recoveries are high enough to make it worth recovering the base metals. TMT do not want to do anything to add to the CAPEX as it is already nearly $400M as announced in their PFS. The plant detailed in the PFS did not have a base metals recovery circuit so adding a base metal recovery circuit will increase the CAPEX. Raising nearly $400M will be hard for TMT and if they add in the base metal circuit TMT will need to raise even more for the CAPEX.

The planned processing plant is more complex, than other vanadium processing plants, due to the need to handle the oxide material. Looking at slide 20 of the presentation just announced by TMT, the oxide profile looks like it varies from 25 - 50m deep and the transitional material goes down to as deep as 150m. The JORC table 1 of the ASX announcement on 21 June 2018, said that mass recoveries for the oxide material can be as low as 1.9% and 25% for the transitional material. Having to mine through the oxide material with low mass recoveries will hurt the cash flows in the early years of production as you have to mine the oxide material first.

This is an interesting project for sure and TMT is advancing well, put the CAPEX stated in the PFS is going to increase, if they add in a base metal recovery circuit, and the recoveries in the oxide and transitional zones are going to be challenging. I am going to wait and watch on the sidelines for the DFS to be completed in the middle of the year and then see what happens.