afr article

There was an article yesterday on the AFR website.

http://www.afr.com/p/business/companies/gindalbie_venture_partner_ansteel_TaJiYaE9n7WdTrqy0UUfXP

The last paragraph I found very frightening

"Despite the setback, Gindalbie said on Thursday it should be operating cash flow-positive during the March quarter 2014 at current iron ore prices, exchange rates and if its meets production guidance"

This is not a good news story here. I/O needs to stay up which is around $136/t.


The US Federal Reserve is most likely going to wind down the QE experiment in the coming months which is going to have a negative effect on the AUD. http://www.afr.com/p/markets/market_wrap/set_to_keep_falling_as_us_easing_LCd1YrZveZiSmtbwqgPNKI

Some things from this article include:

-On Wednesday the IMF released a report which reiterated the official view the Australian dollar is overvalued by “around 10 per cent”.

- The Australian dollar will fall to US90¢ in three months, Credit Suisse predicts, not just due to tapering.

- More falls in the Australian dollar will come in 2014, Credit Suisse expects, with the dollar to hit US80¢ by November 2014

And last but not least KML needs to maintain its current production in order for to have any chance to get cash flow positive....Then we have KML debt repayments starting....

dear oh dear me. All the holes in the Swiss Cheese are lining up and it is not good IMO.

Obviously there are 2 sides to the story but its hard to see the AUD staying up.

GBG / KML and AnSteel have their work cut out for them here. The next operational update is certainly going to be interesting.

All IMO.