Hi StoopsFor the long term viability of a mining operation, I...

Hi Stoops

For the long term viability of a mining operation, I prefer to do the calcs on the jorc resource of .03% Treo.

In the beginning you maybe able to cherry pick the resouce with higher grades but at sometime you will have to mine less favoured ore

I am not sure where you get your basket price from but I will use the one provided by TMR of $54 Kg

http://www.techmetalsresearch.com/metrics-indices/tmr-advanced-rare-earth-projects-index/



Two examples to value the concentrate

1) Pg 4 from the DJ Carmichael report available from NTU

http://www.northernminerals.com.au/new/index.php?option=com_edocman&view=category&Itemid=217

"92% mixed REO will be priced between 60% - 80% of the 99%
REO China FOB equivalents. Our model is conservatively based on pricing reflecting 60% of the 99% REO FOB
China prices"

and

2)Pg 10 Peak Resourses scoping study

http://stocknessmonster.com/news-item?S=PEK&E=ASX&N=616953

"The price used for the cerium oxide concentrate is based on the October 2012 (FOB) China price of $15 for high
purity cerium oxide discounted by 47% to adjust for the 65% purity of the product, resulting in an estimated price
of US$8 / kg"


I suspect CUX would sell its' 40% concentrate at a 60% - 80% discount to the TMR listed basket ptice of $54 =

$10.80 Kg to $21.60 Kg

Cost of wet and dry processing for:

18MTPA = 18,000,000 x ($3.35 + $0.45)
18MTPA = 18,000,000 x $3.80
18MTPA = $68,400,000

Tonnes of TREO produced:

= Mined Alluvium x Grade of Alluvium x Recovery Rate
= 18,000,000Tonnes x (0.03/100) x (70/100)
=3,780 Tonnes TREO



Value of TREO produced: (worst case)

=Tonnes Produced x Value
=3,780Tonnes x $10,800
=$40,824,000


Value of TREO produced: (Best Case)

=Tonnes Produced x Value
=3,780Tonnes x $21,600
= $81,648, 000


CUX will have to have a serious look at REO Concentrate refining and move up the value chain especially if they beleive it will be

"low capex
? Mixed RECO3 product will be high purity & radionuclide free"


Pg 26

http://www.stocknessmonster.com/news-item?S=CUX&E=ASX&N=626283


Tonio