I beg to differ and note it is a fantastic time to be trucking Mn ore at the moment.
Logistics costs have previously been quoted at about US$1.14/dmtu. This aligns to the PFS where trucking was noted at A$42/t (US$0.89/dmtu @ 33.1% and .70). Port related costs were A$12/t (US$0.25/dmtu). If fuel was say a 30% of trucking costs and doubled it is now up US$0.27/dmtu. Yep costs are up and perhaps now nearer US$3.20/dmtu than DFS's $2.91/dmtu - but so is revenue.
44% Mn's last known price is about US$6.20/dmtu and if you take off about US$2/dmtu for grade/shipping costs you are at US$4.20. Take off the costs (inclusive of higher trucking) of US$3.20/dmtu and there should be about US$1/dmtu of margin before smelter credits. Smelter credits may increase that to nearer US$1.50/dmtu of margin. The planned expansion will both improve volumes 3x and slighly improve margins as fixed costs are spread more widely. Post expansion, US$1.75*33*1,000,000 = US$58m before tax. That could be the profitability run-rate later this calendar year. Yea its a great time to be trucking this ore.
And that's before any profitability improvement from HP.
E25 Price at posting:
99.0¢ Sentiment: Buy Disclosure: Held
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