700m after tax in the next 3 years is a massive over-estimate....

700m after tax in the next 3 years is a massive over-estimate. Iron Ore prices are relatively high now but if you look at the futures curve you would see an average price over the next 3 years of 115 USD per tonne or roughly 175 AUD. Their cost to produce per tonne is 100 AUD. That leaves 75 AUD profit per tonne or roughly 50 AUD profit per tonne once they start paying tax. On roughly 9m tonnes remaining that is equal to 450m.

450m is best case, assuming no cost blowout and capex offsetting depreciation. That leaves 800m cash in 3 years time and then there are unknown rehabilitation costs involved. If they wound up business then you would be lucky to get 750m back to investors which is 61.5c per share, a 15% return on the current share price in 3 years.

Those that focus on ratios like P/E are ignoring the simple fact that the mine is near its end of life.

Those that focus on the rate of cash build are ignoring that they have sold down almost $200m in inventories in 2023. Those inventories are gone. They were a one off cash boost. The rate of cash build in the future will be much lower. Spot prices will likely decline to meet the futures curve too.

Those that focus on cash ignore the fact that it is sitting there doing nothing, will likely be reinvested (quite possibly poorly), and that shareholders will not see any of that cash for a very long time.

I am still substantially long this stock but its hard to see the catalyst.

The only hope I see is they announce a mega special dividend in the second half and I think the odds of that are very low. The market already expects a dividend (2c-4c as an interim I would guess). That is basically priced in. If they decide not to pay a dividend as soon as possible in FY25 the stock is going to fall 10-15% as investors will realise their cash is trapped. If management truly wants to reward shareholders, they would pay a mega 20c special dividend in August. But I doubt it. Short of that happening, I see this stock trending sideways, if not, lower, and I am looking to exit.