Aussie $ Impact, page-20

Samson,

The contract between KML and Ansteel is that KML pays for the shipping costs. Shipping is charged for transporting the ore from Geraldton to Qingdao China. GBG/KML have not been forthcoming on shipping costs. By way of comparison FMG costs are $3.50 per tonne. I have used Atlas' shipping costs as a comparable size company. It may be a bit low.

As at 24 May 2015 KML had a debt of $US1.481b. Subsequent to that their have been further loans taken out to keep KML afloat and the total loan from my calculations is $US1.9b.

There is an interest component which I have allowed at 5% (some might think this is low). That equates to $US12.00 per tonne.

KML also has to pay the $US1.9b back by 2030, in 15 years from original loan. I have assumed that there is a requirement to pay it in annual instalments. This equates to $US16.00 per tonne.

One thing KMcConkey pointed out (18/01/17) was the maintenance costs due to harder rock than allowed for in the engineering design which are being incurred. His estimate was $US50m pa. or $US6.25 per tonne.

This maintenance may put the net cash cost over $US100 per tonne (without depreciation).

Hope this assists. Any further comments welcome.

The real issue for GBG is that KML is paid the proper allowance for the magnetite not the addition of a measly .85c per tonne. That is insulting to GBG shareholders.