Marampa Freight Decision

Decision required by 31 October

Choose how to wait for freight: shut the mine, or keep producing into stock

Path A · Shut in November, decide in March

What happens: Care and maintenance from 1 Nov. Sell existing stock. In March restart for April, or stay shut.
Commit now: Workforce and supplier notice in October; retrenchment about $1.1m (placeholder)
Peak funding
Worst-case regret
Best when

Path B · Produce and hold, decide in March

What happens: Keep mining, build stock to about 2.1m wmt, no shipments to end February. In March ship 3 OGV a month, or go to care and maintenance and sell the stock.
Commit now: Gerald funds the stockpile; interest at the SCN rate
Peak funding
Worst-case regret
Best when

1 The root cause

Freight takes the margin out of every tonne before a single fixed cost is paid

Exhibit 1One dry tonne of concentrate, from index price to cash$/dmt

Platts 61% CFR less freight, trader margin and Fe premium gives realised FOB. Costs are Q4-26 plan rates per dmt produced, Financial Model tab rows 97 to 106 and 81 to 89.

2 Where we are

Realised FOB against the three cost lines that decide what to do each month

Above the variable-cost line, a tonne produced should be sold. Below the shut line, care and maintenance loses less than operating. Between the two, operating still pays part of the fixed cost we would carry anyway.

Exhibit 2Realised FOB on the selected freight path, against cost per dmt produced$/dmt

Cost lines use plan production and the fixed cost kept while shut from the inputs panel. Dec-27 FOB steps up with the 65% Fe index switch in the Financial Model.

Why holding stock can make sense, in one line

3 Cash, month by month

What each option does to cash each month

Bars are monthly free cash flow; the bronze line is cumulative cash from October, with its low point marked. That low point is the funding each option needs. All six panels share one scale. Shaded months are care and maintenance; the dashed line is the month freight returns to normal.

Exhibit 3Monthly and cumulative free cash flow by option$m

Free cash flow after capex, retrenchment, restart and STKR rehandling, before funding cost. MML level, zero opening cash.

Exhibit 4Monthly free cash flow by option, table$m

4 The two walls

Storage limits how much we can hold; cash limits how long we can wait

Exhibit 5Concentrate stock at month endm wmt

TRT, PLO and STKR combined. Storage limit from the inputs panel.

Exhibit 6Cumulative cash from October, before funding cost$m

Zero opening cash. The low point is the peak funding Gerald provides. Selected freight path.

5 The unknown

No one knows how long the shock lasts, so we compare every length and ask which choice is least wrong

Each line is one option's total value over the window, for freight returning to normal after 0 to 15 months. Value is free cash flow, plus stock left at December 2027 at that month's price, less interest on the cash Gerald funds.

Exhibit 7Total value by option, by month freight returns to normal$m, Oct-26 to Dec-27

Bold lines are the two decision paths, which take the better of their two March branches for each freight outcome. Marker shows the path selected in the inputs panel.

Exhibit 8Value at the selected freight path, and the worst case across all paths$m

Regret is the shortfall against the best feasible option for that freight outcome. Maximum regret is the largest shortfall across all 16 outcomes. An option that breaches the storage limit is excluded.

6 What changed in this update

Item	Previous	This update	Effect

7 Assumptions and owners

Input	Value	Owner	Source	Status

Method. Each option runs off the Financial Model tab of the 25 Sep Consolidation file through the SCN tabs; base plan cash flow ties to row 114 less row 108 in every month. The page recomputes live: free cash flow moves with price one to one on tonnes sold, so a new price or freight path shifts each option by tonnes sold times the change in FOB. Freight is modelled as two levels, during and after the shock; no forward curve is used. Figures are MML level before interest and tax unless labelled; funding cost is shown separately and in total value.