blowout

GINDALBIE Metals is expected to announce another cost blowout at its Karara iron ore project, increasing the cost of the flagship operation by hundreds of millions of dollars.
The Perth company has said it will provide a revised project cost estimate by mid-year.
This indication of rising costs came just two weeks after Gindalbie's December quarterly report said the budget for the project project remained in line with previous forecasts at about $2 billion.
UBS analyst Glyn Lawcock said he would not be surprised if Karara had been experiencing capital expenditure inflation.
"We have been hearing that the market for labour, materials and contractors has tightened in Western Australia over the past 12 months and we believe the market has been expecting" the capital budget to increase, he said in a client note.
Mr Lawcock said a conservative estimate of the likely increase could add 30 per cent to the project's cost, requiring an additional $600 million.
The original cost estimate of the joint venture with China's Ansteel jumped by 20 per cent in May because of an increase in infrastructure scope and general inflation.
Mr Lawcock said Gindalbie may have to tap the market for $90m to cover the cost jump.
"It would depend on the magnitude of any capex increase, which would dictate whether GBG could fund internally or if it would require an equity raising," he said.
The miner is planning to produce 10 million tonnes of ore annually in stage one, aiming for a peak of 30mtpa.
http://www.theaustralian.com.au/business/new-cost-blowout-at-karara-iron-ore-mine-hits-gindalbie/story-e6frg8zx-1225999029841