cux's lower cost per tonne of ore., page-28

Ausheds,

Let me get what you are saying perfectly clear and make some extrapolations from the info provided.

The Morgans Report you referred me to states (Page 21) Mount Weld has an average grade of 8.1%.

Therefore, (100/8.1) 12.4 Tonnes of ore would need to be mined to contain 1 tonne TREO. (excluding recovery rate)

That 12.4 tonnes of ore needs to be (1) Mined (2) Crushed; (3) Ground; (4) put through a floatation process; and (5) Put through a filter press; to finally get 710 kilograms of Concentrate taking into account 71% recovery rate. (Process shown on Page 23 of Morgan Report).

(I seem to disagree with the Morgans figures to get 1 tonne of concentrate you would need only 4 tonnes of ore. As you will see below I have calculated 6.3 tonnes and that is at the lower grade of 36%. 40% would require more tonnes of ore. Do you agree with my figures or Morgan's?)

Taking into account the recovery rate you would need (12.4/.71) ~17.5 Tonnes of ore to get a concentrate containing 1 tonne TREO.

If the concentrate is 36% then 1 tonne of concentrate will contain 360 kilograms of TREO. So, 17.5 x .36 = 6.3 tonnes of ore to get 1 tonne of concentrate of 36%.

So are you saying Lynas's ore is being:

(1) Mined
(2) Crushed;
(3) Ground;
(4) put through a floatation process; and
(5) Put through a filter press;
for $2,500/6.3 = $396/tonne

Or, all that processing costs (17.5 x 396) $6,930 for the ore containing 1 tonne TREO?

Also, this is 25% of the costs of processing to the final rare earth elements?

It is interesting to note the processing in Malaysia costs 66% or $18,300 for the 36% concentrate. I wonder if the 40% grade of CUX would correspond to a 11% reduction in those costs? What about the reduction if the concentrate can be developed to 50% as earlier predicted for Charlie Creek, which would mean nearly 40% less CUX concentrate would need to be processed compared to Mt weld concentrate?

Shipping is calculated at 9% so that equates to $277.

So that totals $6,930 + $18,300 + $277 = $25,500 per tonne of seperated rare earth elements. (Note I didn't take into account a recovery rate in the processing in Malaysia).

The TMR Advanced Rare-Earth Index states the basket price of Mount Weld is $40 so this would indicate a gross return on processing of ((25500/40000)*100)= 63%.

If this is what you are saying, it would seem a very good figure to me, so I am not denying that Mt Weld is not a good thing.

I do worry though when I may have found potentially one mistake in a report how many others could it potentially contain?

What I am contesting with you is that without CUX's scoping study you cannot say that CUX's costs will be too high. Be patient Ausheds and please just wait until the CUX scoping study comes out before rushing to judgement and stating that a higher grade needs to be found before Charlie Creek is viable. I don't believe you have the information to make that statement.

It is also interesting that if NTU had the same mining costs as Mt Weld with NTU's 0.73% grade compared with Mt Welds 8.1% would that mean the idicated mining costs for NTU would be about 11 fold of Mt Weld i.e.11 x $6930 or $76,230?


Happy New Year to all!

Cheers