These guys are great when it comes to starting up the mine and...

These guys are great when it comes to starting up the mine and production. It is all about sales now!

Sales have been opportunistic but the initial flurry of sales to Europe were never maintained as shipping costs jumped and ate into the margins. The last 3 quarters show that sales are just being used to generate enough cash to support the continued operation of the mine and that stockpiled product is getting to extremely high levels.

June 2022 Qtr - Production 243,000t Sales. 128,000t. (Stockpiled 408,000t)
Sept 2022 Qtr. - Production 221,000t. Sales. 137,500t. (Stockpiled 492,000t)
Dec. 2022 Qtr. - Production 152,000t. Sales. 83,900t. (stockpiled. 559,000t)

The December quarterly showed slightly lower but reasonable sales to the BSMs at 47,000t (63,800t in Sep Qtr) .

The positive for the March quarter will be the fact that they have signed 2 contracts, each to supply 45,000t to the Asian market. If they can achieve 60,000t to local BSMs, 90,000t to Asia and add a ship to Europe (36,000t), they will achieve 186,000t in the quarter. Assuming they make at least $80/t, that would generate around $15m of revenue which is almost 50% of last years total revenue. String a couple of quarters together like that and things will start to look pretty rosy.

That said, they don’t seem in too much of a hurry to sell on the cheap, so I expect them to continue to hold product until they can maximise their profits which probably won’t be great for any investor looking for consistency in performance and dividends. I’m still a big fan of these guys and think they are sitting on a proverbial gold mine; the stockpile alone is worth $US70m at $US125/t. With a MC under $A60m and a cash pile of $14m they are cheap. Yes IOP is volatile and who knows where it may head but with a 67% Fe product, they will reap the rewards of slowly selling down the stockpile and continuing to replace it.