makamint The answer is fairly obvious, they are not making any money because they are spending it all on Capex. This has been a known for a long time.
According to the companies recent announcements they make $45/WMT AUD. They are currently producing 10Million WMT per annum.
IMO this doesn't match up to well with the last Quarterly so you will need a better man the me to work it out for you, but i suspect it is fairly close. Remember part of their tonnage is value fines which they don't make as much on.
Without the capex at the current Ore price they should be making over $100Mill AUD per quarter.
It's looks like China is going to have a particularly cold winter. This means mines closing and if last year is anything to go by it also means record prices for Iron Ore. The Iron Ore price is starting from a fairly high base this time so you should expect to be surprised on the upside.
Every time AGO's SP has moved up or down more than 25% for a length of time it has been because of the ORE price.
Because of the potential capex involved in Horizon2 the market values it at "0". So it has the potential to surprise on the upside.
The Aussie is starting to tank again now at .93 US cents today. This means more money for AGO!
Whether you buy or sell doesn't make any difference to me as I am usually in and out in the same day. However, where I have made the most money with AGO is when people disregard the Iron Ore price and the Aussie dollar. Eventually the AGO punters catch on and we get big jumps in SP in just a few days.
IMO barring the management doing something really stupid, there is nothing to worry about except the IO price and the Aussie. If Iron Ore drops back to below $115/dmt and the Aussie starts to rise, head for the Hills! Apart from the above, if your going long, place your bets turn off your screen and walk away and come back in February then you can scream at me if you haven't made money. You will!
AGO Price at posting:
$1.14 Sentiment: Hold Disclosure: Not Held
