Ann: Binding Mining Agreement, page-4

I haven’t followed Syrah for a long time but how is this total regime good for ASX holders?

Australia has no double tax treaty with Mozambique so let’s do the numbers on $10 million worth of revenue:

5% goes to the government free carried.
3% off the top royalty = $300k

Let’s be generous and assume %70 margin = $7 million GP

Apply Mozambique taxes of 32% of 6.7mill (net of royalties) = 4.556m after tax for the JV.

And SYR have 95% of that = $4.328 million.

That is before a single dollar of Australian corporate tax is paid and this is assuming 70% Gross Margin which would be another $1.298 million tax leaving just on $3 million or 30 cents in the dollar. That’s not accounting for any corporate overhead costs at all.

If the margin drops markedly then this really impacts to the downside.

I can understand why this is one of the most shorted stocks on the ASX, the numbers IMO don’t work.

Ted