Ann: Scheme of Arrangement and Demerger, page-15

According to KML Financial Report I had purchased from ASIC last year, the revenue for 2017 was A$872m on sale of about 8.1 dmt Concentrate. The realised CFR price was therefore at A$107.6/dmt or US$82.5/dmt at an average AUDUSD of 0.7668 in 2017.

The bank borrowings (FR Note 16) as at 31/12/2017 was US$3,215m and the effective borrowing rate was about 3.98%. The interest cost worked to be US$127.9m or US$15.8/dmt in 2017. The cash cost on CFR basis was about US$73/dmt. This gave an operating cost ( CFR cash cost & Interest charge) around US$88.8/dmt.

Currently the CFR price for 65%+ concentrate is around US$100/dmt or more. Therefore KML should be in positive cash now, at least US$12/dmt.

FR Note 17 stated that GBG had also provided an interest free subordinated shareholder loan amounting to A$50m repayable by of 31 December 2022.

The long term prospect for KML is very good in view of change of China policy towards clean high grade IO and the recent Vale disaster which should greatly benefit KML.