Ann: Successful Completion of Southdown Project P, page-11

re: Ann: Successful Completion of Southdown P... Let's say they dont decide to build the pellet plant in Malaysia (statements by Clark make the pellet plant seem increasingly unlikely).

Costs are then 2.6bn lets be conservative and multiply by 1.2(upper limit as provided by PFS) so 3.12bn.
multiply that by 0.7 because grange only owns 70% of the project. = 2.184bn

estimated production 10m/t pa. LEts be conservative and multiply by 0.9 and then by 0.7 for granges share of production = 6.3m/t pa.

lets say costs are $70 per tonne not $60 as the PFS says.
Lets say Iron Ore price is $160 not $180 as it currently is.

So $90 revenue per tonne = $567 million per year

minus tax of 30% = 396.9 million per year.

Discount NPV at 10%
So if we are conservative on every input figure, the project is paid off nominally in 5.5 years and the NPV over a 20 year mine life (company says it could be extended beyond that) = $1,195,884,797

If we take the figures given in the PFS and the current iron ore price then that NPV figure is well over 3 billion. Given my bullish medium/long term view on iron ore prices and the fact that the execution risk is lower for Grange than for other magnetite producers because the already have an operational and profitable mine I think the PFS is very much positive news for the company.