1. Whilst only 664kt in quarter, 370kt was in March alone. This is close to the shipping levels required to meet the June quarter targets. 2. The grade is consistent - average 65% Fe for each of the last 3 quarters. 3. Nice "piggy bank" of ore mined ready for shipment - 1.2Mt worth $170m! That is this quarters' total projected sales already sitting in stockpiles ready for processing and loading. Mitigates production risk. 4. Waste to ore strip ratio is exactly where we want to see it. Has trended down over the course of the year, was just 1.3:1 in March qtr and forecast 1:1 in June qtr. 5. Cash operating costs for qtr of $57.90/t ($55m of cash op costs and 0.95 Mwmt mined). Heading in right direction and should come down significantly further in June qtr. 6. Working through the Sept, Dec & March quarterlies, YTD FOB costs total approx. $145.2m against 1,780 Mwmt shipped (average YTD FOB costs of $81.50/t. They expect full year to be 2,900 Mwmt shipped @ average FOB of $75/t - which implies they are targeting 1,120 Mwmt for June qtr @ average FOB of approx. $64.50. A very significant decline in costs. 7. Looks like the Panamax ship rates have settled down with some easing still apparent. Every $1 saving on freight rates = an additional AU$100k+ per shipment to MGX.
Overall, no surprises and confirms my thesis that MGX should start generating $100m+ quarterly cashflows from this quarter at current iron ore and exchange rates.
MGX Price at posting:
51.0¢ Sentiment: Buy Disclosure: Held
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