How do you read the 6 Apr report wrt future profits? My read: It looks like their costs are $US60-70/t (p.13) vs spot price $83 (p.25), IOW they should be marginally profitable at best (I'm assuming that fixed costs and maybe royalty-type costs are external to the [$83 - $60-70] equation). But they also seem to be expecting very large increases in coal prices over the next few years (p.24). So my reading is that for a cost of $1+- they have catapulted themselves into 1mt+ pa production, but with profits not rolling in until a little while down the track. At which point they cash in in a big way without any further delay or expenditure, and can then use the $$ to open up some other major resources. And all for a mkt cap of just $50m. How far off the mark am I?
SMR Price at posting:
24.0¢ Sentiment: Buy Disclosure: Held
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