On 27 Oct 2016 I posted my assessment of the costs for KML. I...

On 27 Oct 2016 I posted my assessment of the costs for KML.

I have updated that assessment.

One of the things that I had excluded is that KML is to pay back the $1.9b loan by 2030 refer to GBG announcement 24 May 2015. Money has to be set aside to pay back this loan.

I have increased the interest on the loan to 5% as FMG pays more than that.

In the Sept quarterly report the cash cost was $US61 per tonne.

The cash cost excluded: "depreciation and amortisation, corporate administration, sale, royalties, ocean freight, interest and financing costs".
An assessment of depreciation and amortisation is somewhere between $US15 to $US30 per tonne, but this is a non-cash items so while important it is not important with respect to cash.

Corporate admin - my guess $US8m per annum or $US1 per tonne.

Sales - have no idea - haven't we got all quantities going to Ansteel - but if KML has a sales force $US2m or $US25c per tonne.

Royalties $US1.40 per tonne refer to FMG 24 Feb 2016 Corporate presentation.

Shipping $US5.20 per tonne as per Atlas costs.

Interest and finance costs - $US1.9b at 5% = $US95m p.a. = $US12.00 per tonne. See Announcement 24 May 2015

Repayments by 2030 $US1.9b over 15 years equals US16.00 per tonne.

Cost excluding depreciation: $US61 + $US1 + $US.25 + $US1.40 + $US5.20 + $US12.00 + $US16.00 = $US96.85 per tonne.

Cost including depreciation $US96.85 + $US15 to $US30 = $US111.85 to $US126.85.

Let me know where you think I have made an error.