Lets get the fact straight rather than perpetuate the fiction so everyone is properly informed.
1. Operating costs independently assessed as ranging from US$80 to $120/t (including royalites). Refer to section 4.13 of Behre Dolbear report. This is why we all got involved in the first place I'd suggest. Nothing has changed other than the HCC prices bringing the entire sector into a negative margin environment.
2. There is a lot of flexibility given within the payment schedule to L&M. Refer to appendix 4
-Royalty payments based on the gross sales revenues of coal from the Relevant Permit Areas. Until Bathurst makes the first performance payment the royalty will be payable at 10% of gross sales revenues decreasing to 5% until the second performance payment is made and thereafter at the long term rate of 1.75%. -Failure by Bathurst to make a performance payment when due is not a breach of the share sale agreement provided Bathurst continues to pay royalties to L&M at the royalty rate applying at the time the relevant performance payment was due. -On the date that the second performance payment is due (and whether it is paid or not), Bathurst is required to issue to L&M shares in Bathurst sufficient to give L&M 5% of the issued capital of Bathurst. If for any reason these shares are not issued when due the royalty rate then payable is increased by 2%. -Bathurst’s obligation to issue such shares will be triggered earlier if Bathurst receives notice from a third party of an offer to acquire more than 50% of the shares in Bathurst. -If on the date the shares are due to be issued to L&M there are options or other convertible rights on issue, on exercise of those options or other rights, Bathurst must issue additional shares to L&M in order that L&M's 5% interest in Bathurst be maintained. If these shares are not issued then the royalty rate payable is increased based on an agreed formula
