phosphate at balla balla, page-9

I had a go at my model by adding in a phosphate circuit.

I've assumed the following things:
Mining is free carried as a cost to the Fe
Admin, overheads is free carried by the Fe operation
Freight to market equivalent to the Fe ($2/t of concentrate)
Milling equivalent to the Fe; $1.34/t of phosphatic gabbro
FOB freighting to China $12/t concentrate.

10Mtpa @ 7% phosphate milled per annum, 67% recover is 660Kt phosphate rock @ 30%

Total cost of milling per annum - $13.4M
Total cost of freight per annum - $1.34M
Total freight FOB China per annum = $12M
Total costs in production = $22M

Total sales @ $40/t = $26M = $4M EBITDA

At $100/t phosphate prices, EBITDA is $43M
At $400/t EBITDA is $241M.

This, of course, doesn't take into account Capex spends, debt, tax, etc. The maths suggest that at $40/t phosphate prices, it's uneconomic. At $100/t and upwards, it's profitable, and of course, at $400/t it's better than gold.

But this is only because of the free carriage of the project by the magnetite - you put the mining cost back in ($2/t ore at 18Mtpa = $36M) and the operation is maginal at $100/t phosphate prices.

So...it looks good as a by-product stream as long as they can get US$100/t or better long term on phosphates, and they make a saleable concentrate, and the Capex isn't astronomical. So, worth watching.