Under the Flinders/BBG current agreement Flinders can decide to...

Under the Flinders/BBG current agreement Flinders can decide to go for a royalty only option at FID. That royalty option was 2.5% but, as I interpret it, would free carry Flinders to production from FID. With current IO prices and outlook it would seem highly unlikely that Flinders would take the royalty option as they could be making considerably more profit by going to production. However, with the SP today trading below $, I thought I’d just remind shareholders what the royalty only option might be worth even though it would appear this is just a fall back position.

IO has recently been over US$200/t.

So the yearly royalty return scenario @$200/t
Exchange rate 0.78 (USD 1 = AUD 1.28)

Realised price say less 18% = US$164/t or ~A$209.92
50mtpa x A$209.92 = A$10,496m
2.5% royalty A$262.4m. That is A$1.554 pa per share

Same calculations assuming IO averaging US$150/t p.a.

Realised price US$123/t or ~A$157.44/t
50mtpa x A$157.44 = A$7,872m
2.5% royalty A$196.8m. That is A$1.165 pa per share

Now let’s assume there is a downturn and the realised price is just A$100/t
That’s A$5,000m p.a.
2.5% royalty = A125m p.a. That is A$0.74 pa per share.

Those are my calculations and could be wrong so please check and comments and corrections welcome.

I have made no attempt to guesstimate the share price for the scenarios above but it would likely be multiples of the share return p.a.

The big question is how far away from FID and production is PIOPMINECO? I am bewildered as to why a plan and timeline to BFS and FID have not been provided to shareholders and the market particularly as currently FMS is the majority shareholder in PIOPMINECO. Is it reasonable to believe that PIOPMINECO hasn’t worked with the other parties involved to produce a plan and timeline? Is that feasible? If not, shouldn’t shareholders know why? The presence of the NBIO should not prevent full disclosure. FMS have reiterated in the last quarterly that there is no certainty of an agreement being reached.

Would some “PIOP BFS/FID - Show us the Plan” emails help? Just asking.....