Ann: Trading Halt, page-101

I paid my visit to site and spoke with the site GM. He said that due to the suspension there were limits to what he could say. I had the impression he would be careful is taking questions even without a suspension. Nonetheless, he was a pleasant fellow to talk with.

I saw less than is shown on the latest company announcement showing a black stockpile.

You have to understand WA mining when considering STA. There are major mining centres that support mines. Kalgoorlie, Port Hedland and Perth are such. They have the workshops, machinery, tools, parts, labour and more. STA is nowhere near these. It's nearest support town is Geraldton 400km away which is a crayfish and farming port. Previously it dealt with Eneabba mineral sands. STA has to be more self-sufficient than other mines. There is no Bunnings down the road. Denham and Monkey Mia are tourist towns 100km away. STA has to have parts and expertise in everything on site. I saw a LinFox double trailer truck with two cylindrical containers. Could this be trucking to Geraldton? I'm not sure how many tonnes each despatch truck holds but trucking for the 800km round trip could be $1 million per month. Drivers would earn $150K+ on an 8:6 roster. Diesel is now $1.90/litre up there, having fallen from $2.65. These rigs would have to return 20% to even bother. Add maintenance for reliable operation. Tyres. LinFox or others could have claws in there too.

People talk about adding dozers like a kid buys a new matchbox toy. It's clear the whole situation scales up when capacity is added. Does the village have capacity? Kitchen? Food supplies? Transport? Ambulance and medical? Management? This is like building on the Mars. You take everything with you.

The plant has no fence or security post. I saw no sign of an airport. This made me think about what exactly the capex covered. I had the impression that critical aspects were done to a high standard but there is a sharp cut-off where other features are concerned. There could be capex post commissioning to round out the place. Nobody gives STA a cut rate because they're starting up. They've been hit with shortages and inflation during the build. It's all cash up front.

I see that media reported Coburn as being a $338 million project. In context, a $30 million blow-out is a creditable performance. It's not like they are a bunch of performing seals balancing beach balls on their noses. The tyranny of distance is at work here, both in costs to operate and in the expectations of distant commentators. If you don't like how things operate there you should FO. Coburn is a high cost operation and always will be.