The Seaborne index 65% Fe IO concentrates has rebounded to US$129.02/tonne or A$188.24 according tohttp://www.custeel.com/en/csi.jsp yesterday.
Based on the KML Operating costs of A$112.6/dmt established in the Independent Expert’s Report and a financial cost (interest plus financing expense) of about A$30/dmt, the mine is now generating a positive cash flow of A$45/dmt, or A$337 millions for shipment of 7.5 millions tonne a year.
The profit before tax would be around A$223 millions a year.
If this favourable price environment can be sustained over next 2 years, as some of the analysts have predicted due to Vale's on going dam problems, KML should be in the position to reduce the current debt level in the region of at least A$500 millions.
with this positive cash flow situation, KML could also be able to embark on the mine upgrade to 16 mtpa and this would made the it long term viable.
Therefore GBG's 47.8% share of KML mine is definitely a lot more valuable than the A$0.026/share buy out offer made by Ansteel.
My vote is no for all resolutions.
