Anyone selling is nuts!, page-8

I have been looking at the geology, and it's clear to me that the Vardy resource is a bit optimistic in it's tonnes and possibly a bit conservative in its grades. This is typical of trying to fit a bad geological model to the facts.

The 73Mt resource is a socialisation of two geological units and two separate systems; a broad low grade Zn+Pb SEDEX system, and a higher grade replacement Cu-Co system. The Cu-Co system is much more strongly associated with the Fish River Fault, and (to my eyes, not having all the data banged in yet) mineralises the pyritic siltstones close to the fault. This forms two completely separate tabular bodies, in the Py2 and Py3.

The PY3 is,at this stage, 1km x 60m high @ ~25m true thickness (horizontal) = ~4Mt @ 1-2% Cu, 0.1-0.2% Co, plus credits. 40Kt Cu and 4Kt Co plus odds and sods of Zn + Pb. This compares favorbly with the high grade Py2 resource subset announced earlier this year of 6.6 mt @ 1.25% Cu, 0.12% Co plus odds and sods containing 82Kt Cu, 10.8Kt Co.

So that's the ball-park beer mat upgrade the Py3 could produce (+/- 30% because this is just a simple polygonal). The PY3, if it is mineralised over it's entire 4.2km strike, would be ~16Mt at the above grades, or 160kt Cu, 16Kt Co.

That's a significant resource, and I think that the way forward will be a better constrained geological model with tighter constraints, delivering higher grades, less tonnes, and better recoverable value.

The other thing to note is that the Py3 hasn't been drilled well at all, especially not far from the fault. This is understandable as the model is being proved up. But the Py2 mineralisation can extend up to 50m from the fault, so as drilling continues and the geometry is better defined, the tonnes could go up.