re: giving us something .. cheap digging Agree,Mate of mine...

re: giving us something .. cheap digging Agree,

Mate of mine working on a new mine development in WA just advised me the BCM digging rate has increased from $2 to $2.50 in the last three months! This is not based on fuel etc but largely opportunistic because there are more projects wanting earth movers than earth movers.

IMO this is early on in the cost push mining inflation cycle. Many new developments are in the feasibility stages but haven't yet actually tried to lock in firm contracts from contractors. Takes years to build up fleet numbers AFTER firm orders/contracts are put in place now.

Many new projects will paying astronomical costs to be the first in line so they can take advantage of the high metal prices, but even then the "first" will take years to develop.

MLI has production fast-track with plants and all machines etc locked in. This will see a lot of profit generated before the eventual increase of metal production from all the wannabies takes prices back towards marginal rates. Deal well structured so mine development is being paid for out of cash flow BUT all costs can actually be treated as immediate expenses rather than capital as would be the case starting from scratch. This means immediate tax deduction of essentially long term capital costs to build mines (no tax equals higher internal cash flow on same production!).

good luck all.