Ann: Preliminary Final Report, page-8

These are mostly annually fixed costs, no matter if they produce zero tonnes of graphite or 20.000 tonnes of graphite or 30.000 of graphite per year .

For a small 6000tpa large flakes operation and around 8 Million$ of annual revenues (at an average price of 1300$ per tonne), the mine administration expense figure may look rather large, but once they expand to 20.000tpa+ (26M$+ revenue) or 30.000tpa+ (39M$+ revenue) the admin expense of 2.75M$ will look simply insignificant.

The administration workload / recquired personnel involved in running a 6000tpa operation or a 30.000tpa operation is virtually the same. It is the variable operating costs that start to matter most once a certain level of production is crossed at the profitablity threshold (for BSM profitability could be achieved starting from 6M$+ annual revenue or 4600tpa at 1300$ per tonne, or 5000tpa at 1200$ per tonne).