tick tick tick kaboom, page-8

peran,

My calculation comes from the recent highgrade.com article. See this thread:

http://hotcopper.com.au/post_threadview.asp?fid=1&tid=1700790&msgno=7901010#7901010

Here's the calculation:

1. Kaboka is "looking for an offtake agreement covering about 180,000t of product… equivalent to about 12 month's supply."

2. "Kaboko will require $US5-10 million during 2012 get two operations up and running at the targeted run-rate."

3. "Brewer said it was costing about $40-45/t to get the manganese product to the mine gate, and then about double that to get it FOB from land-locked Zambia - versus… manganese pricing of $US250-300/t."

So my rough conservative calculation of gross profitability:

$250 (mn price) -

$45 (cost to mine gate) -

$90 (FOB) =

$115 x

180,000 (t/yr) =

$20.7m per year gross profit.

... but I forgot KAB gets 75%, so that's $15m/yr. And don't forget, this is only a tiny part of KAB's portfolio.