a difference a day makes, page-60

I've worked in the resorurces industry for many years and i have found that practically every project is finished the the opex budget instead of capex budget. This is done (as I understand it) to minimize tax (i.e. they can write it off against income now instread of waiting for it to depreciate) and to make it look like the project was delivered on budget.

With that said, it seems that Karara are taking this fudge to an extreme. It should have occurred to me that they would do this when they have so little capital budget left, plenty of construction to complete, but still saying they would deliver the project "broadly inline" with budget. If they are running at close to 8mtpa at 63% Fe they would almost certainly be cash flow positive now. And yet, we need to wait several months (I.e. until construction is complete) before declaring commercial operation. In one sense it may look like these cost overruns were unexpected, but I am confident GBG knew of them a while back but were very careful in their wording on each announcement. Notice that they have been careful to only make two key predictions in recent times - capex broadly in line with budget, and 8mtpa (without reference to grade) run rate by the end of April. Both predictions may be close to the mark, but both have been fudged from where I stand.