Ann: Sale of Shine DSO Project , page-14

GBG will be entitled to 20c per tonne for every dollar the Platts 62% Fe index price trades above the level set out in the agreement. The price and grade achieved by MGX is irrelevant to the agreement, it's the performance of the index that counts and the quantity of ore that is sold. Obviously if the grade and price achieved by MGX became uneconomic, MGX would just stop mining until such a time as it became economic.

For example, if the Platts 62% Fe index price averaged $15 above the level set in the agreement over a period where 2 million tonnes per ore were shipped, GBG would be entitled to $6m less the $3m up front payment they will receive when the first commercial ore is shipped.

This is not a bad deal for GBG. They get to realise value of basically a 'locked' asset. It would have been unlikely that GBG could have progressed this project, considering the bulk of its assets are tied up in KML.

It seems an even better deal for MGX, and looks to be geographically well positioned with their Fields Find prospect.