So for the Dec Qtr, your going off a total production of the Qtr for a total of 24000 metric tonnes. (Stage 1 Operations Update - 14 Jan2019)
And your quoting a cost for the Dec Qtr of:
Staff costs : $1,149,000
Admin: $746,000
Mine property in develop costs*: $21,427,000
* Includes the costs of operating the mine and processing facilities, and other cash costs relating to the sale of spodumene concentrate during commissioning and ramp-up of the mining operation. These costs are classified as cash flows from investing activities until such time as commercial production is declared and are capitalised against project development costs (net of the sales of spodumene concentrate (pre-production) referred to above).
Total cost of $23,322,000.
So for the production of 24,000 tonnes, cash cost being $971.75 AUD dmt.
That’s a bit disingenuous using a quarter that only produced 43% of nameplate.
The above model uses a run of 44,000 tonnes per Qtr, not 24,000 tonnes. It’s not comparing apples with apples.
So let’s look at the projected outflows for next quarter.
Production: $24,000,000
Staff costs: $1,200,000
Admin: $500,000
Total costs of $25,700,000
Production of 80% nameplate. = 44,000 tonnes
$25,700,000 / 44,000
= $584 AUD dmt.
So,
If spod pricing on the low side of $650 USD dmt
650/.7 = $928 AUD dmt.
Margin = 928-584 = $344.57 AUD dmt
For the QTR = 44000 x 344.57
= $15,161,142 AUD
For the year (x 4)
=$ 60,644,571 AUD
- Interest of 26,100,000
= 34,544,571 AUD before other costs, for the year.
Looking at AJMs target cost curve, as per their last presentation, this looks to be a reasonable ballpark figure for costs as they have 2019 being anywhere between $600 - $400 AUD per ton for costs. I expect as production goes up towards nameplate, costs will come down per tonne, improving the cash margin.
View attachment 1530622
In comparison to the industry I see A40 is quoting $800 AUD per tonne in costs for 2019 as per their last presentation. Looking to drop to $550 in 2020. This is logical as they have a high strip ratio of 9:1
View attachment 1530628
GXY being between $647 - $592 AUD per tonne would also lend credence to the AJM cost modelling figure. It’s not way out of line. Mt C has had a bad year with the Floater Rd drama and Yield Optimisation Program coming online.
View attachment 1530634
I have yet to do an analysis on PLS. They are probably the best to also compare costs with to see whether the model is out or inline with the industry. If someone feels energetic enough....
Disclaimer, I am long on AJM and GXY. DYOR. No responsibility taken for the calcs above.
