Southdown Project, page-43

Well, think about it... SouthDowns calcs were based on an average price of US$109 per tonne to achieve a IRR of 19.2% - and current pellet price is $258/t...? (@gaz - that's still about right?) - so... that's a nice boost to IRR if its expected to last for a while... Also, they've got what - $190M cash stashed away in the warchest so... Looks like it might be an "idea whose time has come" - let's see!

SouthDown:

The project free cash flows (after tax), were subjected to a discounted cash flow analysis
(DCF) using a discount factor of 12% nominal. The net present value (NPV) of project Free
Cash Flow for the 28-year plan is estimated at $753 million as at the feasibility study date,
generating an internal rate of return (IRR) of 19.2% per annum. This is represented by
some $13.14 billion of Free Cash Flow over this plan, excluding initial capital and is based
upon Operating Sales less Opex, Sustaining Capex and ongoing rehabilitation expenditure.
For the 28 year mine plan the average concentrate price assumed for this product grade
is US$109/tonne at a AUD:USD exchange rate of $0.75.