3q'13 financial results, page-9

Moore master is not needed to reach 10mtpa but it is needed to get 100% utilisation out of trains and additional transport would be required to catchup. Neither of these events occur if Mooremaster works but both occur if it doesn't and you can't make it up with hopes and dreams. I'm not going to make a comment about gbg telling the full story up front. We've done that to death over the past years. I'm just noting the facts regarding utilisation, production will be down or costs will be up. It's probably a max of like 400kt per annum and gbg are aiming for ~10 so if they allowed rail capacity for 10.2 but can only achieve 9.8 why would they tell you? I've never said this will send them bankrupt . It'll just increase costs a bit because it doesn't work right.

It's like building an airport runway with a terrible seal design. You'll have higher maintenance costs every day of the year. Then if the airport is Perth you'll have delays that increase flight costs because the flight crew is on the plane for perhaps an hour longer. Obviously this wouldn't matter for KMLs airport because it's not at full utilisation but they'll still have higher maintenance costs if the seal was incorrectly designed and is cracking everywhere.


I'm not going to say production costs will be higher than planned. But I would say reserve some due skepticism that costs will be on target given the delays in production and numerous "minor issues" they've had. I doubt they reassessed production costs given they seem unable to work out how much the project will cost.


Dyor.