Ann: New Haematite Project Secured , page-3

This one slipped under the radar.

As far as I can tell, Ferrowest have bought out Ngalia's 60% of the Fe interests in one of ARU's blocks, ARU retaining the remaining 40% of Fe, 100% of REE.

Ferrowest reckon that a $50M capital expense over 12-18 months can get a project up producing 1.8M tonnes of ore at operating costs of $94/tonne, FOB price currently around $150/tonne.

The Ngalia study said $35M capital, suggesting a possible makeup of $21M debt, $8.4M FWL, $5.6M ARU.

Ferrowest think $50M is more likely, same ratio is $30M debt, $12M FWL and $8M ARU.

By my maths, $50/tonne * 1.8M tonnes = $90M profit in the first year, allowing $9M interest over 3 years (10% on $30M over 3 years - two to build and one years worth of production, high side estimate) would pay back the capital with at least $30M left over, some $12M to ARU. Following years would be $90M split 60/40, some $36M/year to ARU!

Not bad for a side project of a $64M company....