Quick back of the envelope calcs for those interested.
Today's move in IO price was about 30 yuan so roughly $4.36 US.
AGO export 14Mt p.a so the increase would translate to an additional $60m US in annual profits.
AGO have an agreement where the contractors take a 25% share of profits above $60/t therefore the AGO share of the increase in profits would be $45m
With that in mind AGO's 'increase' in profits if this move were to be sustained and hedged against in the future would theoretically enough to command the existing MC without taking into account the current $200m p.a profits.
Has to one of the most undervalued stocks on the ASX....
AGO Up up and away, page-100
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