Ann: Fortescue announces US$700m repayment of 2019 Term Loan-FMG.AX, page-74

The 88% you're using is the (12% yearly average) discount for ore grade I presume. I certainly agree it has to be included, but in fact, it already is included in the 28.3 breakeven guidance FMG comes up with.

On the slide its the "dmtu adjustment" of 2.5, I am almost certain (though I grant that that is anything but obvious from the slide, dmtu = "dry metric ton unit", but here the emphasis is on "unit" not dry, as its in comparison with the Platts 62 Fe CFR standard unit, which unit is 62% not (58.3 (Fortescue Blend fines) or 56.8 (Super Special fines)). The "moisture" in the same slide is the adjustment to dry from wet (FMG averages 8.5% moisture) and the Platts 62 FE CFR is in dry metric tons.

*If* in the first line of your rule of thumb heuristic the 0.88 was the discount and *if* the 28 was the figure from FMG as the breakeven guidance, which I suspect is the case, then you were accounting for the discount in ore grade twice.

"I think there are also some Financial Cost (leases etc), explorations cost. I'm sure Tugs (90M) and VLOCs (270M) are not in capex."

There definately are all of those things (in the annual report - so I agree they matter), but I'm not sure they aren't included already. I suspect the finance lease costs would be included in the "interest" item because FMG typically bundles them.

Exploration costs are relatively small. Not sure if they are part of some item in the 28.3 breakeven.

Why are you sure Tugs and VLOCs are not in the 2.6 capex figure? I agree they are not "sustaining" capex coz they aren't present yet to be sustained, but they could be *anticipated* capital expenditures relevant to the coming financial year of 2017, no?