Ann: 200-250Mt Initial Exploration Target at Yere, page-22

re: Ann: 200-250Mt Initial Exploration Target... WC,

Those figures you have quoted appear to me to be very, very optimistic. And are not only different from what I have been told, but are counter-intuitive. For instance, the difference between 150 microns and 25 micros is six fold – but your energy requirements are substantially more than that. As you require a smaller and smaller grind size, in order to liberate the magnetite from the silica, your energy requirements increase exponentially…

For instance, you would probably need an initial coarse grind to get to 150 to 200 microns, another grind to get to 60 or 70 microns (gold producers in the Yilgarn typically grind to 90 microns – and typically use two grinding circuits), then a final grind to get to 25 microns. Each one of these circuits will need a separate crusher, because you will have different crushing balls, volume requirements, and rock will self crush beyond a certain point (it does so initially). Can you imagine a circuit that could crush 15Mt pa – now that would be incredible.

Not to treat anyone with any disrespect, but 1mm is 1000 microns. So 150 microns is 0.15mm and 25 microns is 0.025mm. So we are talking about very small particles here.

One of the key challenges for any potential Mid West producer is that particles at that size (25 microns) will typically remain in suspension for some considerable period of time. Invariably the business models for Mid West producers require slurry pipes (similar to that used in Tasmania) with the magnetite in fluid suspension until it is loaded on the ship. Importantly at this time, that ore has to be dried substantially, otherwise the Capesize (or what ever) will be transporting enormous amounts of material. This is clearly an unprofitable solution for everyone.

An additional problem is that particles at 25 microns tend to display ionic attraction to water. So although they (the particles) will settle out in time (they are certainly not colloids at this size) – without some sort of mechanical process, it will take a very long time.

Then there is the challenge involved with drying out the magnetite slurry so it is suitable for shipment and for the customer to pellitise (without blowing stuff up – the reaction of H2O at 1250 degrees would be very cool – from a distance!!!). All this is additional energy requirements on top of the crushing

Hence - Yerecoin is probably sitting pretty...