Just a quick back of the envelope calculation on impact for GXY:
Assume a 20% drop in contract pricing
Assume average FY18 pricing at US$1,000/ t
Equates to future ave price of US$800/ t
Assume previous unit cost of US$450/t
Equates to a reduced average margin of US$350/t
Using Forecast production of 220k t p.a.
Forecast future positive operating margin of US$77m or A$106m (using exchange rate of $0.72)
I'm pretty comfortable that the current market cap of A$923m is still way under the mark given we also have over A$400m cash in the bank and this scenario (above) seems to be pretty extreme.
The Xmas turkey will still taste pretty good!!!
GXY Price at posting:
$2.27 Sentiment: None Disclosure: Held
