Ann: FIRB Approval for Beyondie Iron Joint Ventur, page-15

re: Ann: FIRB Approval for Beyondie Iron Join... Okay Ladies, lets sober up and get real.

$200,000,000.00 is not enough to build the thing. Why? Karara Stage I is a nice project, not too much bigger than Beyondie, so lets compare Beyondie to Karara.

Karara capacity 8Mpta magnetite con and 3Mtpa hematite -> 11Mpta.
Karara construction cost $1,975,000,000

Beyondie is (3/11=) 27% of Karara.

27% of Kararas construction cost is $540,000,000

Ahh, but some of you are going to say that this comparison is not fair, Beyondie is different to Karara. And how right you are.

We all know that Karara needs to grind really fine and EMG does not think this is necessary at Beyondie, but the flip side is that a lot of the items used in construction are not fully scalable, meaning that you have to build a crushing circuit and Beyondys cost will be well over 27%, as will a lot of the grinding circuit, power, water, etc. Four times the size is not four times the price. This is why lots of companies go bigger and search for economies of scale.

And lets not forget that the Karara estimate is after everything has been studied and proved. Dont get me wrong. EMG is on the way, but there is a lot to do before we get to Gindalbies position.

The final project will look different to what we see now and it will likely be financed by a mixture of equity and debt, from EMG, CMIC and maybe others.

And then we have another question. Is 3Mtpa reasonable (profitable)?