Q4 Earning Discussion Area, page-77

I think I can get you to withing $100 without even trying. Here is why. In this past quarterly we had 66,888,000 in production cost, and we produced 40,400 tones of spod. Now if you do the straight up math of 66,888,000 / 40,400 = $1655/t... however the cost that was stated on the quarterly was $1536 or a little over $100 better per ton than the math would state. The reason for the difference in cost is complicated but it has to do with how inventory is used, but for the purpose of this example lets just use the math - 100 for an approximation. Ok now if in this quarter we did not improve at all on the $66,888,000 but we produced 48,000 tones the result would be 66,888,000 / 48,000 = $1393 or A$1293 after our $100 adjustment. A$1293 converted to US is $853/t... not $650 yet, but lets take that a step further to nameplate tones. 66,888,000 / 56,500 = 1183 or $1083 after our adjustment which converts to USD $715.00.

Ok, so that example assumes that we did NOTHING to lower our cost of production, it assumes that all of the upgrades had no effect on cost whatsoever we just produced more tones. So now lets do the same thing but lets assume that we did put a dent in costs with our upgrades, after all we spent a tone of $$, we better have believed it would make a difference. So lets run the same math as in the first example however this time lets take 10% off the cost of production from last month.

60,199,000 /48,000 = $1254 or $1154 after adjustment, this is USD $ 761.00
60,199,000 / 56500 = $1065 or $965 after adjustment this is USF $ 637.00

Like I said it is not all that difficult to see a clear path to $650, but I believe there is even more to be had and I will explain that in a later post where I will be talking about production costs for this month... hint I have already given you what I think this month could be..

GLTAH and way to go on MOBLAN