$100 share price, page-433

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Klue

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19/08/24

12:47

Post #: 75268350
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Originally posted by scrabble1: ↑

I’ve posted about this a couple of times on here too. The transcript was very telling. I think that analyst remarked with fascinating accounting treatment.

When I read that, it rang many alarm bells. They had facilities available but opted to go for a prepayment from an IO customer instead!

So they can advertise that net debt is only $4.4b? Their key ratios like net debt/ebitda etc look more favourable? I’m fairly sure analysts and the market will look through that and take the $0.6b into account irrespective of the accounting treatment.

What’s worse is that it has backfired as the IO price has plummeted in this FY. They also need to fund the interest costs of the prepayment from lower than forecast cashflows.

FMG had a close call in the mid 2010s when the share price fell below $2 and it looked like their debt load was too big to handle. Right now, it’s double whammy for MIN. Lithium has capitulated and IO has considerably corrected. Their gross debt (including prepayment) would be circa $6b as at 1/7/2024 (after $200m payment to red hill )

Yilgara would be bleeding and they still have about 3m tonnes to ship out. How much cash would they be losing per tonne for the remainder of year? Then there’s rehabilitation costs?

pilbara hub would now be marginal, most likely cashflow negative once sustaining cap is accounted for. While their fob is $35 lower than yilgara, they have much greater discounts, more moisture and lower grades.

Lithium would be a mess at present, in particular bald hill which they were ramping up throughout the June 24 HY.

yes they’re getting $1b at one point this year for the toll road but they still had plenty of cap ex to fulfill before it was finished. I think transcript said another 65km. Onslow will be a drain until they get to max run rate. That fob charge they’ve quoted would only apply once they achieve that run rate and who knows how much stripping/cap ex will be incurred to get to that point. discounts were greater than expected too according to the quarterly.

interest charges and debt will continue to grow in the foreseeable future. It’s insane how indebted they are relative to the profitably of their operations. I’m looking forward to the financial report in a couple of weeks

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Haven't followed closely, is that prepayment interest bearing? Definitely red flag accounting if so.

Edit- Answered in another comment.

Last edited by Klue: 19/08/24

MIN Price at posting: $45.05 Sentiment: Hold Disclosure: Not Held
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$100 share price, page-433

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$100 share price, page-433

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