real cost per ton , page-3

72-76 per tonne. Doesn't include royalties or shipping.

Royalities are 5% on magnetite. ($7.75 at $155 per tonne)

Shipping is $13-$15 which is subtracted from the contract price.

I.e. Spot price is US$155, GBG (well KML) would receive US$140-$142 per tonne to take into account the shipping (CFR). This is standard, and i've found that all the miners were almost 'hiding' this fact. They don't include it in operating 'cash costs' because they don't 'physically' pay it, its just subtracted off the amount received..

So at $155 per tonne the 'real cost' is around $95 for magnetite. BUT price received is $186 to account for 20% magnetite premium. So the margins are extremely high right now. THIS IS WHY WE NEED THIS TO RAMP UP!!! Note there could be a small discount to the mag for moisture etc. Not sure on this. But it would be immaterial really.

Also the contract price is not $155 per tonne, its lower :P Just using my example on the spot. GBG won't be using the spot price.