Thanks Firezone.
I've got similar memories of and conclusions about the previous history with Posco. But I would add a proviso that they didn't act in a way that allayed my concerns at the time that they were kicking tyres. Still history now.
I'd like to see us retain that much of Coburn too. I'm not sure how feasible it is but might depend on end customers and their capacity and appetite to fund future supply. I'm looking at the basic numbers and, for initial mine life, I'm seeing final product option cost an additional $50m capex for an additional $70m NPV. Setting aside the rubberiness of NPV's (10 discount rate is reasonable enough), I'm not excited about a $20m uplift - it's only 6% or so on current cap, a margin that could be engulfed by overruns. So on the basic numbers, I'd probably prefer the cheaper capex and less complex ongoing business scenario. However what if the final product option was more attractive to a potential off taking funder?? In that case Luke might have leverage to extract higher ownership retention in which case my thinking could switch.
As far as free cash from Fungoni flowing in time for Coburn, depending on timing of STA contribution I'm hoping you're wrong! Lead time on Fungoni build is 13 months, say 16 months to solid cash flows. FID in the next few months. Lead time on Coburn 21 months (off top of my head) plus a few months. Possible for FID before the end of 2019. It's theoretically possible for STA to anticipate opening 2 mines in 2 years and probably needing to put money in for Coburn before cash flows from Fungoni. This is a problem I would like for us to have!
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Thanks Firezone. I've got similar memories of and conclusions...
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