Ann: March 2018 Quarterly Activities Report, page-65

THis is one of the only quarterlies where the CEO has not started off with "I am/We are pleased to advise"

It was at the end of January that the CEO had mentioned the following:

https://www.theaustralian.com.au/bu...r/news-story/fcf7f11d7e6c9cdfcc48d93e049e071d

Atlas Iron chief executive Cliff Lawrenson says the iron ore producer is back to making money after a difficult December quarter.
The Perth-based miner’s share price fell sharply yesterday after it released its toughest set of quarterly production figures since its company-saving recapitalisation in 2016.
The company revealed its Pilbara iron ore operations had lost $1.2m in cash during the December period as the wide discount for lower-grade iron ore materials that has hurt the likes of Atlas, Fortescue Metals Group and Cliffs continued to bite. Its operations were also disrupted late in the quarter by port restrictions and cyclones.
The company’s total cash position fell by $10m to $104m over the course of the quarter, with shares in Atlas falling more than 16 per cent to 2.6c each in the wake of the news.
Mr Lawrenson told The Australian the disappointing December figures would be an aberration.
“We are back to making money in our daily operations and probably have been since November,” he said. “The price above $US75 (a tonne) works for us even with the discount, although it would be a hell of a lot better if there wasn’t such a discount.”​

Now this was at the end of January. The iron ore price was pretty much the same throughout the month of February.
Therefore already you have 2 months in the March qtr where the average price of ore was in the high 70s which was substantially higher than November, where they claim they were profitable in any case.
The month of March should have seen their put options kick into gear and protect their cashflow. Alternatively, further fixed hedging contracts should have been entered into during Jan/Feb to maximise cash inflows for the month of March.
Also, you had a situation of large port inventories being drawn down during the March qtr that were built up during the Dec quarter (over 300K+). THe costs in relation to this iron ore sold during the March quarter should be irrelevant to the costs reported during the March qtr as this was shipped to the port during the Dec qtr and therefore would have been subject to lower fixed cost dilution (around the costs reported for the Dec quarter).
This explained also why the working capital position was weaker during the Dec quarter. Cliff mentioned during the Dec qtr report that the "Company’s cash position is adversely affected by the high level of port inventory built up at Quarter end". However the working cap reconciliation in the cashflow shows negligible movement by the end of the March 18 qtr.

SHipping costs should have been well down during the March quarter. There were many reports of shipping lines reducing their charges substantially during the March 18 qtr. I see zero reduction in this regard. (Something about this was posted on HC during the qtr)

Depreciation and amortisation is higher even though there were lower tonnes shipped. Did the depreciation rate increase during the quarter?

Also USD 8 per tonne higher average fe price (AUD 11) led to an increase in AGO realised price of AUD 1. So even with lumps making up 50% of total output, the discount overall has increased to nearly 40%?
Of course there is the presentation in MArch that reaffirmed again that the fines product with lower impurity is increasing the fines price, which confuses the situation even further.








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