Sulphuric Leach Method Discussion

As we wait for the upcoming revised SS I thought I'd share some numbers. Unfortunately the November SS gave us very little to work with, so plenty of assumptions need to be made.

I'm going to take an excerpt from our friend @AussieBryan post as it covers quite well what we can expect in way of improvements to the Sulphuric Acid SS.

1. If lump ROM material was chosen in coming months to be the most economic option to beused in the PFS, then there will be no magnetic separation circuit required at all. (COST & TIME  SAVING)
2. The potential of using a coarse 2mm concentrate for a heap or vat leach operation is now under revue astest results demonstrate it would reduce the amount of material leached by ~50% and potentially shorten leach times. (COST & TIME  SAVING)
3. A 2mm concentrate beneficiation plant would be a simpler design to the facility used in the recently released Vanadium Scoping Study that generated a 106 micron (~1/10th of a mm) concentrate with the potential flow on of capital and operating cost savings. (COST & TIME  SAVING)
4. Board is committed to examining potentially lower capital and operating cost project development strategies that may also deliver a shorter development timeline.

We sill have a lot more met work to publish but hopefully it confirms the aforementioned cost/time savings mentioned.

The biggest inputs effecting the SS/PFS are throughput, recoveries, capex/opex. None of which we have a clear indication of, hence some assumptions need to be made.

Using a base case of 7Mtpa, 60% recovery across the board, US$ 700m capex and 100% margin the numbers are as follows:

I've based the CAPEX estimate off of similar sulphuric acid leaching projects, namely from INR's work + a contingency was added for the sake of conservatism (hopefully).

Tony did mention however in the FNR presentation a 10Mtpa operation, although it's difficult to know whether or not he was referring to the original processing route, nevertheless I will include numbers based on a 10Mtpa throughput operation.

Playing around with these numbers it's feasible to see how they can align with the price tag/payback period reported in the November SS, although I believe throughput here may be overstated. The US$1.4b-$1.9b price tag was just too much of a burden on this projects IRR, hence why lowering capex is such an important milestone hoping to be achieved in the coming months.

This bar chart shows how the credits from pig iron/titanium/ammonium sulphate (haven't heard ammonium mentioned in a while but the credits there add up and the outlook for ammonium is actually quite bullish) can account for almost all operating costs (assuming operating costs are 50% of revenues), acting a significant buffer against volatile commodity prices. I'll probably get around to doing some sensitivity analysis a bit later.

As mentioned in the tables this does notinclude any credits from HPA/Magnesium as enough assumptions have been made as it is. Let's not also forget how this route offers the option of scalability so finance may only need to be secured for Stage 1 production whilst Stage 2 is financed through the projects operating cash flows.

This in no way constitutes investment advise, simply sharing some basic numbers to prompt a discussion. I believe if upcoming results fall in between either of these two scenarios it would be quite a positive outcome for shareholders.