Ann: Giffen Well $3m PFS on schedule , page-4

Looking forward to the PFS to seem some more details on the cost side of things.

Can anyone please explain what the following means in respect to the expected costs.

“We have further work to do on the capital cost, but we expect this to be in the order of $300 million per annual tonne of iron ore concentrate..."

It just doesn't read right to me, are we looking at $300 million CAPEX, OPEX or a combination of both.

The best I can work out, we are looking at $300mil pa after taking into account CAPEX to produce 5 mil tonnes of 68.5% FE, equating to costs of c. $60/tonne FOB, however just want to make sure my understanding is correct or close to.

If this pans out to be correct, we would be laughing at those prices. Even if we look at a LT IO price of $80/tonne 62% FE, so $95/tonne 68.5%, we are looking at a 30-40% ROI or 175mil pa over a 30+ year mine life.

Obviously there are many other factors to consider, most notably raising the capital however clearly we will be looking at getting Chinese funding or a full buyout from the likes of Arrium anyway.

A $5.25 bil ROI over 30 years has got to be worth $250-300mil or anyones money.