march 2011 quarterly report, page-14

Believe original Feasability Study had costs of (2.5+10+44+11.5+4.4+22)=$94.4. That was going
via train into Adelaide.

Same study expected Pricing to remain high $150-$160 until end 2012, giving $50 margin.
but then IO pricing drop to $100-$120.

Then company insight article, 10 Jan, they mention operating costs of $85 per tonne.
Average ore price $135 per tonne, still providing margins of $50 per tone. (page 2)

The 6th August 2012 - Wilchery Hill Project update, mentions in the Mining section a cost saving of $5 per tonne. They are also looking to remove the need for 3,000 containers and reduce the transhipping distance from eight to five miles. Guess theres savings there but they couldnt say what they are because the are based on approvals. If those approvals come then i guess they can clarify the savings.

So lets assume then the cost is $80 (or less if approvals come off).

The real factor on econmoics then is IO pricing.

I'm seeing alot of articles out there (just google "iron ore price") and its hard to say. Right now all we know is the price is plumetting - latest i have (look at mbironoreindex is $90). I've seen analysts talking of $83, and now even $75. In the short term, everyday its taking a smashing.

However I've seen a lot of people still expecting this to be a short term hit, and that China itself (due to low grade iron) needs the price to be >$110. Ive seen the same said of FMG and other major projects.

Now there are certainly low cost producers out there, but are there enough to satisfy global/chinese demand
(once current de-stocking completes)?

So right now I'm glad IFE arent shipping - since there wouldnt be a profit and instead they are concentrating
on cost reductions. If they can drop the costs by another $5 and iron prices remain >$100 then we could be making
$25m per year. Current market cap is around $35M, so that would be OK. Not great, but OK.

I dont think any of this is a management issue. Yes I certainly thought we'd be shipping already given
past announcements, but if you consider that we are not because instead they are concentrating on reducing
costs, is that good or bad? I'd think good.

I dont think anyone in the world expected IO prices to come off so fast, so surely thats not IFE management
issue either. Believe the guidance provided was always correct at the time.

Just wish I had a crystal ball and could say that IO prices were guaranteed to remain above the (vale described)
floor of $120. Then we'd all be laughing (once we actually shipped anything).

In the mean time ANY cost reduction is significant, for viability and if/when IO prices rise enhanced profit.

Would love to see a revised Bankable Feasability Study though.....

I notice that Sentiment by users is now pretty much Sell or Hold and no-one is recommending BUY. Im not suprised.

I'll Hold and Hope (to the future of chinese growth, a stabilisation and increase in IO price, and a boat with ore
shipping early 2013)


Theres enough cash in the bank to complete the studies, improve the resource (with more drilling) and wait for the approvals.

There's not enough cash to actually mine & ship and some sort of financing will still be required. Dont think we should (or even could) be rushing into that now.

Good luck to holders.