pros buying at 28c?, page-21

I never really understood why people look at charts. I have seen a few posts with their tea leave predictions of imminent 33 cents in the next session due to a V shape that looks like a bottom dip....

If I look up in the clouds I see a dragon should I call Bilbow Baggins?

If you take a coin and flip it a 1000 times then plot it in excel, you will get all the different shapes that you see in this chart. So yes you have a 50% chance of being right if it will be up or down tomorrow. Can't wait to see if you flipped the coin right.

All this does is get being excited and upset over a coin toss prediction. Lets step back to the fundamental valuation of the company (e.g. FCF). If I want to make a dollar I would look at predicting how many dollars the company can generate.

Let's assume they get to their target output of 8mt per annum. This becomes your revenue for the company - the COGS or cash costs. If the investor presentation is a good indicator it seems their is a pretty good margin at today's iron ore price.

So a potential way of doing this is 8,000,000 * spread less SG&A less Interest less tax for net profit. Add back your depreciation then remove capex/exploration costs.

I am hesitant to give my numbers as you should DYOR and make your own assessment about potential production.

I personally love shorters and these auto trades as I see this as a great long term buy, please sell it down to 20 or even 10 cents. When they are finally in production and the cash flow is published we will see what it is worth.

Markets reward cash not pictures, good luck.