Spodumene Prices, page-4733

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   1. just trying too get my head around what is the "real" cost of production here based on what we know about the last quarterly report.
      That way, we can know if we are break even, losing or making a profit when the spod price changes

   
   

I will use CIF operating costs as opposed to FOB costs used in the waterfall diagram as it seems to be the more comprehensive of the two eg it is described as ...
"Unit operating cost (CIF China) includes the unit operating costs (FOB Port Hedland excluding royalties) plus freight and royalty costs. Royalty costs include a 5% state government royalty on the FOB selling price, a 1% native title royalty on the FOB selling price"
*cost of sales(CIF) = 235,800 x A$733 = A$173m
*income tax (16%) = A$52m
I won't include interest on borrowings of $452m as that would probably be covered by interest earned on $1.6bn of cash in the bank.
Sustaining cap ex etc is probably operating margin - cost margin from operations (see on the waterfall chart) ie $123m - $59 = $63m
*sustaining cap ex etc = A$63m
Total costs A$288m
convert A$ to US$ divide by 1.5
US$192m
per tonne $192m/235,800 = US$814
US$814 per tonne
So break even is probably around that figure.
Sadly at US$790 we are probably burning cash at $US5.7m a quarter.
(US$24 x 235,800 = US$5,659,200)
Or in Aussie - A$8.5m per quarter
Throw in the quarterly spend at latin resources ie $20m and the Pilgangoora development ie $180m ($200m combined)
and you should get some idea as to what we are dealing with here