Hello,
Here is response to your questions:
Q1: Production for refractory calcined bauxite is expected to commence in the middle of 2011, although actual stripping and mining of raw bauxite will commence much earlier that this date. All that, obviously subject to a positive Feasibility Study (to be delivered in approx. 3 months) and successful financing (currently having access to 50-55% of the actual CapEx costs). The initial production will be for 100,000 MT of RASC bauxite per annum, expecting to increase production to 300,000 MT by year 3...
Q2: Bonasika resource is expected to provide the raw bauxite for a constant 100,000 MT per annum (7-9 years, potentially more). This necessitates the mining of a bit less than 3,000,000 MT of raw bauxite (mine 3MT of raw bauxite to produce 1MT of RASC bauxite). However, we have just started drilling at Waratilla for a Resource Outline and the commencement of a 2nd FS there, by using our recently purchased sonic rig. The capacity of this rig is huge and thus drilling more than 2 holes per day, within 4-5 months, we will have proven a resource bigger than the current Bonasika deposits, but it is expected to be in greater depths, therefore a higher mining strip ratio. The subsequent development of Waratilla will provide for the significant expansion of our calcination business.
Q3: Of course in our in-house NPV analysis, but not compliant by any means yet, we have taken in account inflation, local taxation etc. The $200 per MT operating costs is a rough figure on an "all-in" basis. The higher component cost within this figure is the cost of fuel for the calcination business. If the oil/gas prices increases with time, (somehow expected...), our operating costs logically will increase, but this is generally reflected into an increased price structure , common in the industrial minerals industry.
Q4: In general, we believe that we are having a robust business plan. But risks exist even in the most advanced and biggest mining deposits on Earth. My philosophy is "...do not avoid risk, but rather embrace it and take measures to mitigate it, ie, always be prepared for the unexpected". Therefore, we have done a comprehensive risk analysis; at the moment we see little risk and almost no fatal risks to our plan. But here are some of them: project development financing risk, metallurgical risk, low political or community risk, very low environmental risk, product marketing and market penetration risks, product substitution risks etc... Having said that, we are well prepared to face adversities and we are currently building the right alliances in the industry to help us mitigate any possible risks in the near future.
Many thanks for enquiring about FBX.
Best regards,
Yannis Tsitos
President & Director
