Ann: Landmark Deal On Costs - Mining Back On, page-88

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16/05/15

08:32

Post #: 15292358
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Originally posted by Winter08 ↑

They should survive but with the dilution and the revenue sharing to contractors it's certainly not all rosy. Love how the contractors get 50 c increase for every dollar and then wit what's left after that they will dip in again for 25% of the net OPERATING cash flow. Making sure they get 25% of cash BEFORE any repayments if debt or capital purchases for equipment or the profit figure is reduced by depreciation charges. Will be tough but that's what happens when you are over a barrel.

From the AFR.

Atlas' three key contractors have signed a two year "collaboration" agreement, under which they will receive a 50¢ boost to their minimal rates for every dollar that the price Atlas receives for its ore rises from between $48 and $60 a tonne. This equates to a benchmark price window of between $US58 and $US70 a tonne. They will also receive 25 per cent of any net operating cash flow generated, after allowing for the revenue share.

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winter08 explains it in a nutshell...

"They should survive but with the dilution and the revenue sharing to contractors it's certainly not all rosy"

- Well done to AGO management for saving the company (and more importantly, to all its workforce), but to be honest, I'm not sure if I will ever become a shareholder again. Good luck to all.

AGO Price at posting: 12.0¢ Sentiment: None Disclosure: Not Held
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