AGO (ASX) AGO technical analysis

Originally posted by grader ↑

I think that the extra stock at port is very important because it inflates their cash costs and lessens their profit, that why Cliff mentioned it.

This is how I calculated the 30 million

Their stated cash cost was $59 per tonne, if they would have sold the extra 180,000 tonnes sitting at the port their overall cash cost would have dropped to $54.80
(They receive $58 per tonne - $12.66 Shipping cost = $45.34 per tonne to come, I am assuming that they would have paid for the mining and haulage of the ore. 180,000x $45.34 = $8.2 million nearly extra income which would have dropped their cash costs to the $54.80 per tonne.)

The average price of iron ore in the December quarter was $65.00 US which = $83.28 if the Aus is 78cents.
It doesn't matter if the price is based on 62%, we don't know what they get paid for their fines anyway.
What we do know is that they get an average of $58 Aus per tonne which is equal to 70% of the iron ore price.

Therefore:

In January I calculated that the average iron ore price was $97.67 Aus (I based that on the Aus dollar being 78 cents on average) if they get 70% of that they will sell their ore for $68 per tonne.

That will mean a profit of $13.18 per tonne and if they sell another 2.2 million tonnes that will equal to $29 million for the quarter.

So in January they should have made close to $10 million and if they would have now sold they extra stock at the port they would have $18 million.

Disclaimer
I don't know if they had paid for all the mining or haulage costs but then maybe they prepaid for the shipping costs.
I assumed the Aus dollar at 78 cents who knows what it was when they pay the bills
I am assuming that the dollar 78 cents & iron ore price $97.67 Aus will stay the same for next two months

Expand

let me get this straight. They sell 10m tonnes / year
That is approx 2.5m tonnes / month
They have .18 tonnes left in port
Therefore this equates to 7.2% ore unshipped (9.18/2.5 x 100)

If this is correct, it is not that much sitting at port.
However lets see how they account for it in the quarterly... do they accrue the production expense in the P&L or put it in a liability account in the Balance Sheet.

But the other point that everyone is missing is: how much ore was there sitting at port at the
end of September? Dont we have to minus that from the ore that is now ready to be shipped??
Maybe someone has that information..