Thanks Bob, I did check all your posts back to October and couldn’t find anything. But I then did what I should have done in the first place and googled it. Found useful site. Thanks also to Lute & Torpy for useful T/A. I’m not smart enough to do that, but I do use a good mate to help with buy and sell targets from his T/A.
FEX C1 cash cost, which includes freight and port costs, is A$76.86. Not sure how that translates to Brazil. I’d expect somethings to be higher, others lower. But let’s be conservative and say it costs them the same in US$. A$ now US$0.76.
The question is the selling price? What do these juniors get for their high grade stuff?
They obviously don’t get spot, if they have offtake agreements in place as they all seem to do. I assume they get somewhere in between spot and that long term average price? Does anyone know? Makes a huge difference to our profit and therefore the expected div.
Let’s take a conservative US$130 guess (IO price in November), as sell price in their offtake. C1 US$77, so cash profit $53/t x 500,000t = US$26.5m, or A$35m. On 1.861 B shares = A$0.0188/Share. A payout ratio of 53% would give us that magical 1c/share div. so that fits nicely.
Now, anything over US$130/t, it goes higher and obviously the reverse is also true (same with cash cost guess). BUT, on our full year projection of 1 million tons, we double my rough conservative estimates for a lovely 2c/share div!
Now that will take some time to prove up as we go. Lots of water to still go under the bridge. But if they stick to their forecasts as they have done so far, we should be seeing those numbers within the next 6-12 months. Be nice if they come out with a forward 12 month production estimate, once in production. That’s all without any upside from that huge area around us.
Nice to dream.
Cheers,
Ned
(20min delay)