Ann: WET PLANT TEST RESULTS , page-3

Hi All,

Interesting article n-terra. The most interesting point I got from it was that resources that need the least amount of acid for seperation will have a substantial benefit of those that use more.

This is excellent point for companies like CUX and NTU whose resources are in Xenotime and Mozanite. From my understanting the TREO in the final concentrate derived will be contained in Xenotime and Mozanite, which is easily desolved in acid. If as predicted in the following statement the concentrate from the 'wet' and 'dry' processing will contain 50% TREO it will require a minimal amount of acid for processing. The announcement stated:

'This wet plant concentrate is now undergoing conventional electrostatic and magnetic separation (Dry Plant) to produce a final concentrate product expected to contain approximately 50% TREO.'

A further benefit will the size of the plant required to acid process the TREO's after the 'wet' and 'dry' processing, which also will be minimal. This will surely reduce capital costs. Both NTU and CUX will benefit from this.

The costs for the electrostatic and magnetic separation (Dry Plant) should be less than say NTU because of the grade of the ore that will be put through this process, which is shown in the following:

A recovery of 76% TREO (Total Rare Earth Oxide) at a grade of 6.24% TREO

Assuming NTU's grade of between 1% to 2% means that between 3 and 6 times more material will need to be 'dry' processed by NTU compared with CUX, for the same amount of TREO. It is assumed in this figure NTU because their REO's are contained in Xenotime and Mozanite will be able to concentrate their ore to the same level as CUX. Therefore, the 'dry' processing should be substantially cheaper for CUX over NTU. It should be noted that resources that cannot be seperated by dry processing will have substantially higher costs than either NTU or CUX.

I believe a number of posters on this site were concerned with the processing costs of CUX's resource. IMHO it can be demonstrated that CUX will have substantial cost benefits with respect to the 'dry' processing and acid processing over all, or at worst, most TREO resources.

I believe the real question was with the cost of CUX's dredging and 'wet' processing compared to the cost of hard rock mining required by most other rare earth companies. This is why I was so pleased with this announcement.

As ausheds will testify, and probably will and give his opinion as well, my opinion is that the 'wet' processing will be economic. I believe for example:
1. the capital costs of dredging the alluvium will be cheaper than developing an open pit mine.
2. the ability to work over a much larger area will allow for the resource to be collected without the constraints that are necessarily imposed within an open pit mine. The constraint will be the size and number of spiral gravity seperators not the size of the mine.
3. There is no need for the ore to be crushed with the CUX resource.
4. The equipment that will be used is readily available as:
'The proposed Wet and Dry plants for the Charley Creek project would utilise identical technology used by the mineral sand industry for recovery of titanium minerals and zirconia.'
5. There is little or no overlay required to be removed to gain acess to the resource.
6. With futher research areas by CUX areas of high grade ore can be identified and mined in prefrence to areas of lower grades.
7. The mining of an alluvium resource can be scaled up over time. For example more spiral gravity seperators can be added as capital resources increase. So borrowing costs can be minimalised and therefore possibly reduced dilution for the shareholders.
...and I could go on.

IMHO the development of the CUX's enormous resource is becoming a better story as time goes on.

The decision of whether the dredging of an resource is cheaper than hard rock open pit mining is a decision that needs to be made by the individual ivestor and that can only be achieved by their research. I have my own opinion but an investor should make up their own mind before investing in CUX.


Cheers