The Rising Influence of Rising Affluence

[dewophile]

when they purchased the property they thought costs would be 40-50s

here is why i am confident they will either hit or come very close to the projected mid 60s cash cost. from teh Q3 Q and A:

Sal Tharani - Goldman Sachs & Co.: Couple of questions. First, the Bloom Lake cash cost which you are still expecting sort of mid-60s exiting December of this year. I was just wondering how should we think about when the Phase II comes in it I probably will most likely start the higher cost or the blended cost will be higher at Bloom Lake at that – till that thing ramps for under six to nine months.

Joseph A. Carrabba - Chairman, President and CEO: Yes indeed Sal that's exactly our expectation, I think you're right on it that even though – while it should be a better experience on the startup of Phase 2, these concentrators is one thing that we're learning the hard way from Amapa, as well as Phase 1 here as they are – they do have a lot of nuances and they're difficult to do that. So, we see the cost in the first half of starting up Bloom in line with the cost we have today with that, and then the blended rate would be the Phase 1 getting down into the mid-60 rate.

in other words the mid-60s cost is based on the 7.2 M volume - and NOT prediated on achieving further fixed cost leverage from phase 2 (i.e 14M tons) that they recently scrapped

i think alot of analysts are focused on this based on the # of questions devoted int he last cc. furtehrmore gldman sachs downgraded in large part based on the fact that they wouldn't be able to meet this cost projection because, erroneously imo, they felt the mid-60s was predicated on the 14M figure. so if they do hit it or come close i think it could move the stock
JMO