Lethal,

It would seem that you are really looking for a big hole in your Magpie estimate to close off the year, and to move on to the Year of the Dragon.

The biggest hole is the assumption of the deposit tonnage to work out some $400B in-situ value of TiO2. This may be a reasonable size of the deposit, but this may be too big to mine all of it. Agex is a good example for comparison. to get around of the conversion from the in-situ to the above-ground value.

The math (feel free to check my simple math)

- Scenario 1: Mine all of it (110M tonnes for Magpie). The production capacity of the mill can be scaled up beyond 0.2M tonnes/yr but the cost may be prohibitive.

- Scenario 2: A portion of 110M tonnes is mined, starting with the best grade, to get something like Argex.

I would leave it at that and refer to Agex PEA summary pasted below for some guidance on the value of Magpie, noting the good profit margin and potential annual income for repaying the capital cost of the operation.

goldhunter (may the Year of the Dragon bring properity and health to all)

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"Argex PEA Summary

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Argex announced the positive results of the PEA on October 26, 2011, which include the following highlights:

IRR (Pre-Tax): 32%; NPV: $2.2 billion (using an 8% discount rate); Payback period of 7 years – assuming a staged, modular plant construction; Total operating cost (net of by-products) of $586 per tonne of TiO2

(averaged over the life of the mine); Price per tonne of TiO2 (trailing 3 year average): $2,846 ($US/tonne);

Capital costs: $801 million; Timeline: 25 years; Life of mine: 25+ years of mineral resources (in all categories);

Production profile: 195,000 tonnes of TiO2 at capacity.

Resource: 44M tonnes (M&I +Inferred)"