https://www.businessnews.com.au/article/Iron-ore-survivors-plan-reset, page-2

Great find newB. Some good numbers quoted in the article from macquarie re KI...... And no mention of an acquisition........


Iron Ore Survivors Plan Reset (28th Sep 2016)
The improved outlook, especially on costs, has prompted a detailed examination of getting Koolan Island
back into production. Investment bank Macquarie is warming to the financial appeal of a mining restart
based on what looks to be an attractive financial case.

According to Macquarie, a restart is highly likely because the total capital cost of repairs would be around $90 million, which would provide access to at least 17mt of ore, sufficient to ensure annual production of between 3mt and 4mt a year.

Given the highgrade and premium price for Koolan Island ore, the mine should be able to operate at a breakeven price of $US35/t. Assuming an iron ore price of $US50/t, the mine could yield up to $US60 million a year in pretax profit for an internal rate of return on capital invested of a very attractive 55 per cent.

Macquarie noted that Mt Gibson had not provided any guidance on the cost of rebuilding the seawall or
bringing the mine back into production, but its analysis assumes that: the total capital cost would be less than $90 million; ore reserves are at least 15mt; and the indicated ore resource is 33.5m/t at 65.7 per cent iron.

Macquarie is tipping a 12month share price target for Mt Gibson of 47 cents because of the mining plans
and the company’s fat bank account, which contains $420 million from residual boomtime profits and the insurance settlement.

At least there are some figures around costs for KI, which sounds promising - 'less than $90mil'.....

Still leaves plenty for an acquisition and a divie for long suffering holders.....

Also a nice price target......

GLTAH.