some basics - sdl vs. fmg, page-11

Hi nectar38, slats7, risdon05, Psychosis et. al.

Thanks guys.

We need to seriously scrutinise a bit more of the numbers/data that they are giving us from now on as this "Star Project" becomes more serious as the weeks/months go by. I hope we can all help each other to search as much information as we can to be able to validate and understand what those numbers/data are actually telling us.

For nectar38, mate on your question, I'll try to answer as simple as possible. Assuming the Nebeba comes up with a JORC DSO reserves of say 600mt, It will not affect CAPEX Cost per ton ore-mined per year - "If" the Annual Production Capacity stays at 35mt/y. It will increase the "Life of Mine" though.

Now, assuming they will increase the Annual Production from 35mt/y to 45mt/y, that extra 10mt/y will need additional CAPEX to make it happen. Therefore, the CAPEX for the upgraded Annual Production Capacity would increase as well.

As it is now, it appears that to setup a Producing Iron Ore Mine in that part of the world would cost a CAPEX-$/ton/year roughly 3 times than in Pilbara region, WA. (ie. US$32.44 CAPEX/ton/yr for FMG vs. US$96 CAPEX/ton/yr for SDL).

And if the indications of increasing the SDL CAPEX budget is right (as being posted today), then that US$96-CAPEX/ton/year is only going to go higher, if the Annual Production Capacity stays the same (or even marginally higher).

In addition, the "OPEX per ton of ore-mined and delivered" is higher than that of FMG (on DFS figures), so it would be interesting to see the SDL (DFS figures) when the DFS report comes up. We will see how the "ducks line up" then.

We do this sort of analyses always with big Copper, Nickel, Lead/Zinc, medium to big Gold and Coal Projects all the time.

The numbers would tell us the true story. As of now, let us be mindful of those numbers, and we will jointly interrogate the economic model and validate it accordingly.

I know you guys have more time to look for information during the day, so let us join together and watch out and dig deeper for info, so we lessen the chance of being caught flat-footed, just in case.

Hope this helps.

By the way, Psychosis, mate - with due respect and in fairness to Rene Rivkin, please refrain from relating his name to my screen name, as there's no relation at all. Thanks.

Regards to ALL.

RVINTL.