jgroenheide, if you read through a few different companies...

jgroenheide, if you read through a few different companies reporting you will see some common terms for IO miners. FMG does a good job of outlining C1 cost, additional costs and CFR. I have tried to help a little bit below.

'For the December 2015 Quarter, average magnetite C1 unit cash cost (mining, processing, maintenance, rail, port and site administration excluding depreciation and amortisation, corporate administration, sale, royalties, ocean freight, interest and financing costs) was approximately USD1 $59 per WMT (September 2015 Quarter: approximately USD $58 per WMT).'

This statement can be read as it cost $59 per WMT to mine, process and rail haul the iron ore. Also included in the $59 are maintenance, port and site administration. Not included in the $59 per WMT are corporate administration, sale royalties, ocean freight and interest and financing costs and therefore these costs should be added to the overall cost/WMT.

'The average realised CFR4 price for the December 2015 Quarter was approximately USD $52 per WMT5 (September 2015 Quarter: approximately USD $56 per WMT).'

I think you are missing the actual information here. The CFR price is the payment KML received per WMT. Ie. the guy in China gave them $52 per WMT. However, KML also paid the shipping costs to get it there and therefore it should be deducted from the CFR price or added to costs, as noted above. Shipping is probably paying around $8-10/WMT, Gero can only house smaller vessels and KML is not going to be able to negotiate deals like RIO which pays around $5/WMT to ship from Dampier.

Looking at the numbers it is $59 (C1)+ $10 (shipping) + $?? (royalties+corporate admin+interest)= Total cost/WMT. Punting at $10/WMT for royalties+corporate admin+interest (probably on the low side) gives you a total cost of $79/WMT.

As I have added shipping to the costs above you can now just take the average CFR price as the actual price received per WMT and not deduct anything from it.......$52-$79=-$27. Therefore KML is losing $27 for every single tonne that it mines or $200 m per year (the Ansteel announcement makes sense now). Hence my previous comments about slashing cost by 2/3. At that point they would be just profitable at current prices. At $60/tonne loss they would be losing $500 m per year and the mine would have halted production long ago.