Capex & Opex, page-7

If you take a look at TNG they propose AU$562m capex under BOOT arrangement, almost identical to KRR.

The annual BOOT payment as per TNG update http://www.tngltd.com.au/images/tngltd---othabaipoh.pdf equates to AU$63m of annual opex.

If KRR target throughput is 5mtpa and we use that AU$63m opex p.a. figure that would mean an additional AU$12.60 p/t (63m/5m) + AU$46.44 p/t + AU$10 p/t (to account for exclusions i.e. mining costs, water etc) equals a total opex of AU$69 p/t which is incredibly robust if accurate?

$69 p/t x 5mpta = total annual opex of AU$345m subtract that off of $1b in revenue and you're left with EBITDA of AU$655m and an IRR of 184% all whilst further optimisation work is pending...

These are purely back of the envelop calculations.. Also keep in mind the total of all BOOT payments made will be greater than the initial capex figure itself so perhaps that's where the excess costs come into play.

Nevertheless the optionality and potential here is enormous, the market hasn't woken up to this yet and given the current climate fair play I suppose, but it seems only a matter of time.