Comparing Red Hill (RHI) with FMS.Red HIllMIN Res is the...

Comparing Red Hill (RHI) with FMS.

Red HIll

MIN Res is the manager of the development and on going operation.

Will finance, build, run the mine and port, organise finance and take on the risk.

Should be noted MIN Res works on models less than 50mt/A (FMS target tonnage)

For that they will pay an upfront payment of some $200m and an ongoing dividend of 2x 0.75% /A to the owners of the deposit.

FMS.

At current prices of $210/T & 50mt/A

FMs will pay BBIG various fees and charges totalling

around d A$1bn per year.

In keeping with the above business modal we assume they will want some payment from the JV partner.

The difference with the RHI is that MIN Res has 100% of deposit.

With FMS the JV partner will have 50% of deposit, all charges (mine rail port?) and are expect to pay fees/charges.

The interesting point to FMS SH is who’s going to finance the $50m BFS which was a strong point for going with BBIG.(or will it drop out of the conversation).

Will the $6-8bn cap ex drop considerably?

As it stands A$1bn/A and other assumed fees paid to BBIG will be for finding a JV partner and brokering a deal.(some people say which tends to suit BBIG more than others?)

Is the delay due to finding a JV partner willing to pay the fees and charges which could be considered more than the market accepts ????

Cheers