numbers in relation to fmg

OK let's assume Iron Valley gets into production, the PFS said 12-15Mtpa was possible so let's work with 12Mtpa. Not sure if that's realistic from start-up but we need a number to work with.

I will run a worst case vs best case scenario (rough estimate) to give us at least a range of what the royalty component could be worth.

Worst case (at 2% royalty):
12Mtpa sells FOB for $80 p/t.
Total sales $960 Mill.
2% royalty is $19.2 Million

Best case (at 5% royalty):
12Mtpa sells FOB for $180 p/t
Total sales $2.16 Billion
5% royalty is $108 Mill.

I have used some very broad pricing on the FOB - $80 allows for the iron ore market to drop off substantially, whilst $180 would require another smallish bull market on iron ore. Neither price is impossible, but the current spot is around $140.

I would like to think that the actual value is somewhere around the midpoint of the best case & worst case scenario, so that would be around the $65 Million p/a mark.

I think if we can get in the ballpark of $65 Mill p/a within a few years it's an excellent result in addition to the $45 Million up front.

Can I have some comments, negative or positive on my rough numbers, I would really like to see the detail on the royalty but right now all we can do is estimate.