Ann: ASX Update, page-14

They had a figure of $59.65 for break even in 2010. Depending on the exchange rate used this could have fallen quite a bit and what their capital expenses are to get up and running. They always planned once they missed the boom to wait until the atlas's and gindalbie's have shut down and there's a rebound in pricing so we are getting towards the bottom of the cycle IMO where the higher cost producers are pushed out the question is will enough supply come out for a rebound and can they meet any lenders return on investment requirements. Agreed odds are deadset against this getting up but you never know.

For some reason I believe this cost analysis was done on 85 cent aud to usd.

In AUD terms $70.17 for 2010

Today at $42.78 USD / ton and 69 cents aud usd $62 AUD.

So there's an $8 gap there to close of course you never convert to aud as all costs should be expressed in usd but easy way to highlight not much difference, however the $17.50 for shipping and $16 for rail should have fallen dramatically with the oil price decline. It's reasonable to expect shipping to have halved 2014 was stating shipping costs to Tianjin from WA at $10/t And that had effectively halved by early 2015 so shipping costs could be $3/t from the northern ports Esperance will be more costly than port Hedland Karratha or Geraldton however for example due to distance. Wages have also fallen in usd terms. Wherever possible they should be looking to save on spares potentially buying some second hand gear etc from within WA as spares will be more expensive to import and the auctions are full of gear but they should save on the EPCM contractor spend as well.

SHIP stage 1 shouldn't be too capital intensive they should potentially jettison the CNR rail deal if it's still on the table the cost of the new locos and wagons is probably not worth it for the finance. I notice cliffs resigned bgc for 5 years @ $520m for koolyanobbing so maybe they are able to keep cashflow positive despite the tough conditions currently.