Ann: Canyon commences drilling at Minim Martap, page-51

Hey Kalenn,

I did a bit more research...

I had another look at your spreadsheet and your post of 27/12.

I may be wrong but aren't you using FOB cost and CFR value? Where is the sea freight cost of US$16.60 you mentioned in the post?

Another thing I'm not sure of...

When calculating the value of bauxite on the CBIX site, shouldn't the input be available alumina rather than total alumina and reactive silica rather than total silica?

In the mineral resource estimate by SRK there are two data sets defined by the lab in which they were analysed. For each data set equations are developed for the estimation of available alumina and reactive silica. The three high grade plateaux, Raymonde, Agnes and Beatrice all went through Genalysis. The equations for Genalysis are:

available alumina = total alumina x 1.07 - 8.2.

reactive silica = total silica x 0.75 - 0.01.         

Let's say that the high grade resource is 50% total alumina and 2% total silica.

A total alumina grade of 50% gives an available alumina grade of 45.3%.

A total silica grade of 2% gives a reactive silica grade of 1.49%. 

Feeding available alumina and reactive silica into the CBIX calculator gives a CFR ore value of about US$64 per tonne rather than US$69 per tonne for total alumina and silica.

Going back to the spreadsheet, if you add in the freight cost and reduce the ore value you end up with...

Reduction in pre-tax margin = $16.60 x 1.05 (moisture) + $5 = US$22 per tonne.