scoping study on monday, page-4

Hi Ausheds,

You old romantic! LOL!! Suggestions of long lunches in Broome at the Sunset Bar (Post #: 9235268). Did you realise that you can see the sun setting over the water in Frankston? I'm amazed you considered my suggestion for a drink in Melbourne, which I am looking forward to if we can get it together. Sorry still LOL!!! Thankyou for the humour.

I realise that there is an arbitary cut-off for resources to be determined as HREO projects. I believe it is a ratio of the HREO to TREO of greater than 35%. I believe this arbitary ratio is misleading because it excludes CUX in statements such as Steve Meackowski's, which you posted on the NTU forum (Steve Mackowski Post #: 9235154). Does Duncan have the 35% ratio?

The 35% figure can only be relevant if mining and processing costs both capital and recurrent costs of different resources is similar, which IMHO is a rediculous assumption.

What the arbitary figure of >35% does is exclude CUX and possibly Duncan (?), from the lists:

a) HREO resources

b) of resources that could go into production before 2016-17.
Noting CUX is 'Working towards start-up in late 2015" (1)

c) of HREO projects ranked by contained HREO.

I made an extrapolated estimated in my Post: 9227299 that the Charlie Creek could contain:

(i) Over 4,000,000 tonnes of HREO; including
(ii) Over 76,800 tonnes of Dy2O2.

IMHO this is rediculous considering that at the moment:

- NTU only has a JORC Resource of 10,500 tonnes TREO.
- HAS has a JORC Resource of ~141,000 tonnes TREO of which 65,250 tonnes is HREO and 6,733 tonnes Dy2O2.
- In the HAS presentation it is stated that 140 Tpa of Dy2O2 is 10% of the world supply. Taking it to the rediculously extreme, a 70% recovery of the estimate of 76,800 tonnes would supply the current world demand of Dy2O2 for over 350 years.

The 35% figure can only be relevant if mining and processing costs both capital and recurrent costs of different resources is similar, which IMHO is a rediculous assumption.

If the cost of exploiting Charlie Creek resource are cheaper than the 'defined' HREO projects then the %HREO is irrelevant. It is the cost of exploiting the resource that matter.

What is the point of including a 'defined' HREO project if the current resource can't be exploited because the JORC estimate is so low the resource can not be exploited because of the capital costs?

Also, what is the 'opportunity cost' of $750 million? 10%PA? Capital raisings I have seen would seem to give the figure as probably more like 15 to 20% PA. So an estimated figure of $75million (10%) to $150 million (20%)? That on a production of 10,000 TPA adds $7,500 to $15,000 per tonne of production for 'opportunity cost' of the capital expenditure alone. If revenue is estimated at ~$480 million and operating costs ~ 260 million i.e. $48/tonne and $26/tonne. Adding the opportunity cost to operating costs gives a high estimate $41/tonne. Therefore, this indicates an estimated return of:

(($48 - $41)/$48)*100 = 14.6%

The arbitrary defining of resources as being a HREO resource by the ratio of HREO to TREO by commentators on rare earths is simply IMHO stupid.

Of course as usual I recommend that before investing in any stock people should do their own research i.e. DYOR.

Cheers

Stoops