Ann: Spectacular near surface intercepts at Montepuez, page-11

General theme is the potential to improve grade and also reduce strip ratio ( more high grade material close to surface ) particularly in the startup years. Essentially adjustment to the mining plan to improve tonnage potential and economics. We wait for the resource update to confirm.

In the value engineering study they increased grade from 8.8% TGC to 12% TGC.

https://www.asx.com.au/asxpdf/20171018/pdf/43nb1pg8vxwwbf.pdf

If we go back to the Feb 17 resource update we can see that reserves are near surface.

https://www.asx.com.au/asxpdf/20170215/pdf/43g0j2dl3qtcbc.pdf




Another possibility of higher grade / tonnage is increasing capacity for offtakes. Currently up to 100ktpa concentrates are planned from Montepuez ( against 4 Binding Offtakes and an MoU ). A 20% to 25% improvement in tonnage could support a 6th commercial agreement of the same scale ( or allow tonnage of existing agreements to be increased ). That could help to offset dilution. I think feasible if they get the mining plan for the starter pit right.

The alternative provided by grade improvements is reduced opex that improves margins.

Both scenarios theoretically improve EBITDA and benefit shareholders.