rumbai12 I don't mean to have a go at you but your figures are all wrong!
Firstly if the Iron Ore price drops to US$100/dmt and the Aussie dollar drops back to say 85cents, then according to the companies figures AGO will make $17.85/wet metric ton Australian before EBITDA.
After EBITDA they will make a significant loss starting with their depreciation and amortization which according to the latest report is about $20/wmt.
With an Iron Ore price at $90/dmt US "AGO" is in real trouble!
However there is not much danger of that happening in the short term.
About one third of the worlds Iron Ore production becomes unprofitable below $120/dmt US.
There would have to be some kind of break down with the Chinese society to sustain a IO price of below $120/dmt for any length of time. A war with the west would probably achieve it, but it is highly unlikely. The latest talk about the Chinese cracking down on Pollution is just nonsense, they are not going to do anything to threaten the lively hoods of their people, IMO it's all silly talk and wishful thinking, not reality!
It doesn't look like Yellen is going to end the US QE infinity anytime soon, however it wouldn't matter if she did. The degree to which China has to come tumbling down in order to sustain an IO price at $80/dmt is just not going to happen in the short term with out some giant macro event hitting the worlds economy.
It sounds to me like you are paying a little to much attention to Macro business. Apart from being a far left wing blog, by their own admission they are running that page, to down ramp Iron Ore stocks. They have been consistently wrong with their forecast for as long as I can remember.
I am a day trader so I don't care where the AGO share price goes or the long term IO price! So if anyone can give me a good reason to put a great big short on AGO I would do it in a heart beat, I just don't see that any of the negativity is justified.
Good Luck!
AGO Price at posting:
$1.02 Sentiment: None Disclosure: Not Held
