market update - nice update, page-3

I'll be the pessimist here....

1. Production - they will be doing 2011 budgets right now and 33K will be the minimum they need to meet a target cost per lb (say $5/lb). Costs will go up in 2011 due to:

2. Murrin Murrin East - is 50+ k's away so massively increased haulage costs

3. Sulphur - to negotiate a price cap you have to agree a price floor, which will almost certainly be higher than they have been paying last 12 months.

This production forecast has got nothing to do with what they actually think they will produce, it is what they need to meet a budget $/lb cost.