- they want to find 7 to 8 years of DSO to ship out for quick, cheap, easy buckeroos. If they can do 35Mt and get, oh, figures from buttocks, $10/t neat profit per tonne, this equates to $350M profit per annum. Terrible, I know. But if you make 8 years of good ore, you've got a cool $2.4Bn.
- this would pay off the greater proportion of a capex for a large beneficiation plant operating on the itabirite ore. This has previously been pegged at a good $3.5Bn inclusive of rail, blah blah blah.
- So, lets say they have a $800M overhang from the capex for the itabirite plant and the first 8 years of DSO mining. Sounds terrible, but remember that to ship DSO they need only, oh, a rail line and a port. They might need $1.5Bn (again, figures from buttocks) up front, and we've already assumed interest destorys all but $10/t of value from the DSO, so this is a moot point.
- so, the itabirite plant makes $5 a tonne because we are pulling stuff from our buttocks, yet we realise that its not DSO and its more expensive to produce. But, ya know, its still possible to make more than the interest on a $800M overhang off 35mt of itabirite. So, uh, looks economic.
- therefore, even if they only make a paltry $5 a tonne they will make money. Which means its ridiculous to speculate about whatever hocus pocus wibble-wobble crud people have been cranking their shanks over.
Ye gods.
SDL Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Not Held
