Southdown

Have created a new thread for Southdown related discussion to avoid clogging up the next ship thread..

Below are snippets from the 2012 DFS and the main takeaways for me are:

1: A Pellet plant is not included in the DFS so the estimated costs of $2.8b or $1.4b for a 5 mtpa plant are for concentrate production and shipping only so we can't remove the estimated cost of a Pellet plant from these figures.

2: Shagang will very likely be our main offtake partner and possibly for all our product from a 5mtpa setup. That will help with securing finance and they may even supply some of it...regardless of how much cash we build up debt will almost certainly be part of financing and done on the basis of a strong balance sheet and good cashflow from SR.

3: Evironmental permits are in place.

4: The quality of the product.

The main obvious reason the plant didn't proceed at the time can be seen in the IO price graph , at the time of the 2012 feasibility study prices were high , GRR only had around $100m in cash and prices went into serious decline and stayed there for several years.

Whats different now is GRR has close to $500m in cash and growing, the current plan is a lot cheaper , high-quality ore is commanding a higher premium in a world where environmental factors play a big part and GRR is in a much better position to take on debt if required


Very much looking forward to the updated PFS to see how current, thinking, new technologies and current costs match up with 2012 forecasts based around $A1.4b ( last esrimate)for a 5mtpa mine.

Cheers Whisky