I know you're talking cash costs here but a massive thing that needs to be considered is ongoing capital cost. They haven't stopped spending on this thing since it was commissioned, and most of it would not have been considered ie. harder ore busting the crushers, leads to more maintenance on the crushers and also there was a need for additional process operations to be built, I doubt that will be the end of de-bottlenecking and additional spending just to get this thing to nameplate capacity. There will be $50 mil more a year easy in additional maintenance on this puppy than what would have been forecast. This should be factored into the cash costs but I think most of it will currently get deferred under initial capex.
I agree with most other things except shipping, Atlas ships for Port Hedland, not Gero, I expect it to be a dollar or 2 more expensive. I have always thought even with their 'cost cutting' this mine is sitting in the $80-90/tonne cost bracket, not including repayment on debt. Reality is we need US$120 a tonne for a few years just to bring the debt under control.
GBG Price at posting:
2.8¢ Sentiment: None Disclosure: Held
