Have You heard The One About

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    If you add the CR of $65m to the $10m of insurance payout and subtract the $20m payout to Credit Suisse, this crew started with more than $55m and by their own estimate will have $15m by the end of the this month. This means that they will have spent $40m in one year (less whatever debt to suppliers and contractors they had ~$6m at the time of the “Innocent Mistake”). And all this with a CDO in place! The budget for this in the prospectus to shareholders mid last year was less than $9m (excluding the “valley-fill tailings dam and land purchases for it which seems to have left off the agenda since late last year). Given the valley-fill dam was the reason for RED’s confidence to recommence the operations late last year and before their “Innocent Mistake”, the stated alternative/reason for decommissioning TSF3 dam, none of this makes sense. Therefore I can’t work out where at least $10-15m has gone. Yet they announce they are under budget?

    And all this for a cement mixer and a thickener that must have a total combined construction steel input of a few hundred tonnes or less? Even in my wildest engineering design dreams I haven’t seen such a small addition to a plant ending up being so expensive. Even adding in a few million for the earthworks doesn’t make it gel. Ironically the very dam (TSF3) that was decommissioned early in 2013 leaving the solely operated TSF4 that started all of this fiasco will be the dam RED uses to recommence the operation. You need to go to comedy club and watch some stand-up comedians to get a better laugh than that!
 
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