one day to go!!!, page-15

As my humble 25+ yrs experience in this mining industry shouting at me, the price basis used in any DFS and BFS would have a very limited impact on the actual profitability of that mining operation (if that has the opportunity to become a reality).

For example in this SDL case, the IO used in the DFS or BFS can be $65/ton, but at the time the actual IO when it's delivered (and that can be 2yrs or 3 yrs from now) can be $200/ton, or $300/ton - who knows.

Now usually, the commercial arrangements would be done mostly before the project says GO, which means (and it usually is the case - IF Chinese are involved) that they will lock the IO Price somewhere near that DFS/BFS number. There are many reasons for that, and the main one is to limit the actual revenue being realised in the country of origin of that product ie. Iron Ore, in this case Congo and Cameroon.

So for example (for the sake of the explanation) the FOB IO Price agreed would be $65/ton ex. Congo or Cameroon. This would then be the basis for all of the commercial transactions and royalty, etc. calculations from those countries. Anything outside that Price would be negotiated outside of those countries. This is true in practically anywhere all over the world.

Assuming the IO Price would be $165/ton as the Market Price at the time, then the marketing company "outside" of those countries would take the difference (ie. $100/ton) .... And that does not necessarily mean SDL would be part of that. Usually, the guys who funded the project would dictate those arrangements, and who will make money outside of Congo and Cameroon.

That's the harsh reality, but that's how the game would be played, especially if Chinese or Koreans are engaged to fund the big $4-B++ "start from scratch" SDL Iron Ore Project.

So the IO Price is not the name of the game. It's the guys who will take control, and who will actually control the digging and moving those dirt from the mine to market... That's the name of the game, especially on that part of the world.

Hope this helps.
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By the way, this is the first listed company that I am involved in (or that I bought into) that the SP goes down a few days (or a day) before the DFS is due to come out. A VERY STRANGE CASE, Indeed.


Cheers...