Ann: Placement - Extension of Settlement Date , page-4

i would not take any notice of the scoping study results

ROY did not release the actual scoping study to the market because it is probably irrelevent (due to probably being based on Western Australian low grind BIF magnetite)

CAPEX of $500m for 2.5mt pa is way too expensive, providing a capital intensity of $250/t, which is similar to GBG

i think a conservative comparison to use is IRD and also RHM

RHM have the same grade and grind size as ROY. the RHM capital intensity is $95/t, including slurry pipeline

IRD have the same grind size as ROY (for 67% concentrate) but their ore grades are lower (17%)

IRD have 150km of slurry pipe and 200km of powerlines to build plus a desalination plant & port (the IRD ground water is salt water)

the IRD capital intensity for 12.4mtpa is $209/t (including a 15% cost blow out contingency)

i have roughly equated ROY's needs to those of IRD. for example 45km of slurry pipe and power lines and, theoretically, included 20% desalination plant (possibly unnecessary) and 50% port capex (possibly unnecessary or less)

doing so, i get capital intensity of $157/t

thus, including a 15% cost blow-out contingency, the ROY 10mpta option probably comes in at $1,570 million

take away the port & desalination costs, it is $1.5 billion for 10mtpa

take away the 15% contingency, it comes to $136m/t

regards