re: anyone follow? dnatron Arhidas has an excellent point,...

re: anyone follow? dnatron Arhidas has an excellent point, Dnatron. If the plant rectification/completion allows ore processing of 4 mtpa then 40,000 tpa Ni is possible; five to six more years perhaps? And then what?

The critical questions are:

What increase in extraction efficiency can be attained?

What are the economics of increasing plant capacity?

Note that the second question cannot be answered before the first. ANL is currently working hard to answer the first question. I believe that the success or failure of Murrin Murrin lies in answering the second question.

And a few comments on your other points, Dnatron....

"The process does not involve rocket science but just plain old fixing up design defects and using quality parts."

To some extent it is rocket science, Dnatron. HPAL creates pretty extreme conditions, and I am of the view that the failings are more likely technical shortfalls than poor design. Yes indeed, fix up all of those silly little mistakes made by those cheapskate idiots from Fluor then it's chocks away!!! The mistake that Fluor made was in signing a fixed price contract based on a huge scale up of a technology that was little tested. From recent events engineering contractors have learned from Fluor's experience. You might note that some of the rectifications involve redesigning the treatment process and developing new materials. To me, this looks more like empirically based modification. To say it is poor design is a bit naive imho.

"Breaking even at say 28,000 tonnes, which means 12,000 is cream on the cake. Not bad at today's nickel prices."


I dont know how you make your estimates, but I estimate the annual costs for ANL to be 270-280 MAUD. From this, ANL's breakeven point for Murrin Murrin would be about 31-32 ktpa Ni at current prices. You would also have to consider the Glencore agreement, which would make the breakeven point higher still. But the estimate is only my opinion. Here is an excerpt from the Half-Yearly Report(Dec02):

(b) The Glencore loan totals US$41.3 million. Interest accrues at LIBOR plus 5% per annum until 28 February 2003
and at LIBOR plus 2% per annum thereafter and expires on 30 April 2005. Repayment commences in April 2003 by
way of the supply of 375 tonnes of nickel per month under the Nickel Offtake Agreement. The Glencore loan was
classified as a current interest bearing liability at 30 June 2002 as the Consolidated Entity had defaulted on meeting
its repayment obligations.

Way too early to be making decisions re this co imho.

Billy