The MGX Thread 2016, page-7

I could be wrong here but if I were MGX negotiating a BI payout I would also be talking up how high grade KI is and how with a lower strip ratio costs could be reduced as this is their argument for income lost under the BI cover. the MD in one of the conference calls said that a BI claim on net revenue lost would be based on how much they could have reduced IO productions costs.
I too am interested in what is covered and I was reading up on the internet over the weekend . It seems what is covered is loss of cash flow as well as costs incurred by the company to reduce loss further, this may mean redundancy costs are covered, inventory lost (500k tonnes) may be covered and the margin MGX can argue that would have achieved.
A quick look at production targets suggests KI seawall collapse resulted in a production guidance change of 2m tonnes so if we assume 15 AUD margin for this, loss of inventory and costs to prevent further losses, I would expect a figure around 45-50m. this would put cash at just under 500m.
I think another potential for a rerate is approval of Iron Hill, as this will create cash flow that covers corporate costs and allows for a small profit, and also ensures rail debt goes to zero. It also allows MGX to maintain staff for another 2 years and park any decision on KI to see how IO performs

To the poster who started the thread, MGX are not looking other IO assets, they have made it very clear they think KI is one of the best IO assets around due to its very high grade in lack of transport issues and if they were to persist in IO it would e through Iron Hill and KI. Lets not forget KI still has 62m tones and even if they changed mine plan to decrease strip ration , one wold expect at least 5-6years of production at 3-4m tonnes from this asset