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Today's presentation.


$204/t x 68% grade - costs = $65 tonne margin.


Sounds great.


20mt x 20% share = $260m EBITA to CAP free carried.


Sounds to good to believe.


Is CAP telling us they are going to produce 20mt pa of pellets?


How costly is that?


What would the capex be?


$2 billion?


Sounds like pipe dreams.


Subtract $20m pa for depreciation, add 30% tax.


On 100m shares, CAP can earn $1.68 EPS.


Still, it all sounds all too big, all too soon.


Pellet plant is probably very expense


Compare to FWL. I recall those 500,000 tpa pellet plants were quite costly.


Compare to GBG.


8Mtpa initial production of high grade magnetite concentrate


Average 68.2% Fe magnetite concentrate grade with low impurities


4Mtpa pellet production at a new plant in China, also in joint venture with AnSteel


average 66% Fe pellet grade


GBG say 4Mtpa pellet production at a new plant in China but CAP say 20Mtpa pellet production at a new plant in Broken Hill.





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20MT is a big target but there are facilities this size elsewhere. Not sure if you are a more reliable source for the company's plans than the company announcements but will stick with them for now. Most JV arrangements involve either limited funding or funding up to BFS or decision to mine. This deal is free carry through mining and production and a massive stack of cash along the way. I'll agree that it does sound too good to be true and maintain some skepticism. BMG have agreed to throw in $81m in the near term so hopefully based on something more than "pipe dreams"



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