Ann: Landmark Deal On Costs - Mining Back On, page-94

Earnings are a barometer of a SP only normally PE ratio of 10-20 to 1. Assets determine the income and valuation, they do in real estate they do in mining, without 5 mine assets and related infrastructure you have 0 income and -$20M losses pQ with a pipedream.

Tell this to Google/Amazon, SIR, Tesla or Twitter, negative cashflow and losses with no profit for last years yet MC valuation of AUS 1B or US30B-100B! its all about future earnings and income expectations.

Fact is AGO has substantial assets and 5 operable mines with a large resource base, it now has reduced costs to $50T v IOP of $62T friday a profit margin of 24% which is healthy, BCI has a lower profit margin.

On this ratio EPS ought to be on 14MTpa x $12 x80%= $134M/1Bor5B = 14c EPS or 3c EPS as i posted last week. So PER x 14 = SP of 42c forget 12c below liquidation value.

The larger the CR the better, they have targeted cash to exceed the debt position...its a hammer above the debtholders heads.

In regard to asset value v liabilities, if its cash is $350M and debt is $300M thats a +$50M cash to loan ratio then you add in the infrastructure, mine, goodwill, expected 5 mine profit ratio, chattels like bulldozers etc then you have a net asset position in the $1B range forget $110M MC right now.

AGO was trading at $3.00 SP in 2010, now 12c, with dilution of shares it will be a penny dreadful for maybe a few days after relisting then move back to market value as the market now knows the shareholders will put in cash to cover all debt and contractors will cut costs to keep mines open regardless of the IOP and WA govt will cut charges.

The debtholders are finished, they will pay the bad ones out and run cash positive long term.

If you think profit is the panacea for all ills then i would recommend to you not to invest in US shares like Tesla Amazon Twitter or any biotech or is SIR, as you would have no profit at all on a large valuation MC on market. If you love large profit and cashflow with no debt then invest in MCR MBN Apple Inc.

AGO is a low debt large production high cost mine plan, now that high cost has lowered and the debt has lowered, thats very positive.

FMG is in a much worse balance sheet and debt position than AGO however its costs are lowered now also.

The EGM will be a standing ovation from shareholders, the company has been saved and the LTHs can buy cheap shares at 8c or so and ramp the SP to 50c again. Multi bagger on reopen for mine.

I like the other holders will be buying CR cheap shares and buying on reopen. A lot of holders and instos will miss out on cheap shares and will have to go to buy on market. You can watch the action from your lazyboy lounge while we make a killing.