Ann: Marampa Infrastructure , page-25

Hi Giys

I hear the concerns about 2mpta initial rail allocation maybe not be a massive FMG, BHP or RIO operation.

I also note Brendon's comments that this is likely just the start and will probably increase over time.

Ridiculous to do so, but a comparison with FMG is interesting

FMG:

(1) MC $12.5 billion
(2) Annual output 40 mtpa
(3) Resource 6.3 billion tonnes

Marampa:

(1) MC NIL
(2) Annual proposed output (rail allocation) 2mtpa (5% of FMG)
(3) Targeted JORC maiden resource 600-800 million tonnes (9.5-12% of FMG)

Assume comparable operating costs of around $50 per tonne

Thus, Marampa's possible value using various comparisons:

(1) Annual Output (rel. to FMG) = $600m
(2) Resource (rel.to FMG) = $1.18b - $1.5b
(3) Annual cash profit (2mtpa @ $50 per tonne cost with $117 gross revenue pt) = $134m pa cash profit x PE 5 = $670m

Ridiculous comparison I know, but it does give me comfort that 2mpta rail allocation (to start with) and TS's call for a $500m sale price are at least in the ball-park.

I've bought more today given TS's strong recent buying :)

Cheers
John