Is Karara now profitable ??, page-83

My estimate of the selling price for the June Quarter is in the order of $AUD109.00. We await confirmation in June Quarterly report.

The cost to mine and transport is $150m per quarter. From Sept 2017 the quarterly costs have been $AUD150.72m, $AUD150.77m, $AUD152.45m, $AUD152.0m. (From Dec 16 to June 2017 the quarterly costs have fluctuated between $AUD134.7m to $AUD158.01M).

This has been on export quantities of 1.83Mt for Sept 2017, and subsequent quarters of 2.128Mt, 1,903Mt and expected June 1,777Mt.

It appears that the costs are now set and do not vary much on volume. This may be regarded as unusual.

The question then arises that if costs are constant and are not affected by volume then wouldn't you maximise export quantities? I have assessed that the limiting factor in exports is the number of trains per week. As noted before they are running at 77% capacity.

If they could increase exports to 2016 figure of 8.52Mt the the0retically it would be all profit on the extra 750,000t (that we dropped this FY) x selling price of $AUD109/t. This equates to $AUD81.75m extra pa.

BUT remember the costs quoted above exclude depreciation and amortisation, corporate administration, sale, royalties, ocean freight, interest and financing costs.


When KML has $US1.481b loan plus $US900 and $AUD244 loans the interest costs chew up any margin.

GBG shareholders are in the dark with respect to what interest rate is being charged.