Positive independent value engineering studies completed

• Value engineering exercise completed by UGL with support from subject matter experts
• Chandler and Sandy Ridge projects remain technically viable with no fatal flaws
• Opportunities identified for better customer service in shorter timeframe & reduced cost
• Significant capital and operating cost savings result in improved project economics

Tellus Holdings Ltd (“Tellus”) is pleased to announce that an independent value engineering (VE) exercise has been completed on both the proposed Chandler and Sandy Ridge Projects. This confirmed that both projects remain technically viable, with no fatal flaws, and identified multiple opportunities for both improved project economics and offering our customers a better service delivered in a shorter timeframe at a reduced cost.

The value engineering (VE) exercise was done by UGL Limited, with support from GHD and other industry experts covering mining, logistics, process design, construction and operations. Ten organisations provided 3,000 hours of independent input over four months.

What is a value engineering exercise?
A VE exercise is a commonly used tool in major project development, with the aim of an independent assessment, improved project definitions, enhanced customer products and services and capital and operational cost savings.

What does this mean for the Sandy Ridge Project?
A number of relatively modest project definition, capital and operating cost improvements were identified which will be incorporated into the project’s Bankable Feasibility Study (BFS-FEL3) base case definition. These improvements reflect the relatively simple nature of the dual revenue kaolin open cut operations, the arid near surface geological repository businesses and the advanced level of work already undertaken. Even before incorporating these improvements, the project enjoyed particularly robust project economics, a relatively low technical risk profile, a strong safety case and solid customer support with a long-term contracted revenue base with blue chip companies.

What does this mean for the Chandler Project?
A number of major project definition, capital and operating cost improvements were identified which will be carried forward into the project BFS (FEL 3) base case definition. These improvements reflect the relatively more complex nature of the dual revenue underground salt operations and the deep geological repository businesses and the level of work to date.

The Chandler footprint has been reduced by removing the proposed Darwin and Brewer facilities. The BFS (FEL 3) will also be developing the use of a number of existing licensed operating facilities that would give our customers a better service in a shorter timeframe at a reduced cost.

“Doing this value engineering exercise is consistent with Tellus’ approach of using proven techniques when developing world’s best practice facilities,” said Tellus Managing Director Duncan van der Merwe.

“We wanted to make sure both our projects had a solid safety case, were as efficient as possible and resulted in improved customer services, lower costs and improved project economics. We are seeing the evidence of this strategy through multiple signed long-term contracts with blue chip companies.

“The next steps are to lodge regulatory approval applications for Sandy Ridge in the next few weeks and Chandler in the next few months and to complete our bankable feasibility studies,” he said.

About Tellus Holdings:
Tellus Holdings Ltd is an infrastructure project development company with a proposed dual revenue infrastructure business model. This involves mining the commodities salt and kaolin and backfilling the voids left from mining with equipment, archives or long term storage of waste. Tellus plans to store like-with-like materials, so as to create opportunities for the future long- term, storage, treatment and recovery of valuable materials or the permanent isolation of waste. Tellus’ business model mirrors world’s best practice solutions operating in the UK, Europe, USA and Canada. Tellus is developing the Chandler project in the Northern Territory (NT) and the Sandy Ridge project in Western Australia. Tellus’ flagship ‘Chandler Project’ has been awarded Major Project Status by the Northern Territory Government.

For further information:
Visit: www.tellusholdings.com.au or contact:

Duncan van der Merwe
Managing Director
Tel: +61 (0)2 8257 3395

Corporate and Chandler Project:
Jane Munday
Michels Warren Munday (Media)
Mob: +61 (0)427 880 083

Sandy Ridge Project:
Cameron Morse
FTI Consulting (Media)
Tel: +61 (0)8 9485 8888