I don't expect that the drop in exchange rate of around 3.65 cents over the last 30 days will help much wrt earnings. IF Q4 2018 pricing was maintained it would represent around A$6/t potential margin effect, however my expectation is that this will be almost entirely offset (if not exceeded by) by the weaker US$ sales pricing for coking and thermal coal expected for Q1 2019. The effect of quarterly production level achieved (total tonnes produced in the quarter) is a far bigger driver.
Note that there are some big cash costs coming up in H1 (and Q2 in particular) of 2019 as outlined in the Chairman’s address to the AGM 30 of November 2018 :
Bounty has now fully paid out the deferred payment schedule to CC Pty Ltd (in liquidation) which has also resulted in the release of their financial security held over the company. Bounty has completed the first $3 million payment to Cook Resources Pty Ltd (a Glencore subsidiary) leaving a $7 million deferred payment remaining for June 2019. By April 2019 the Company is required to provide security to replace Cook Resources environmental assurance bond held by the Queensland government.
and Short Term Focus
The focus over the next 3 months is based on upgrading or replacing some of the older equipment that was initially rented or restarted during the mine start-up phase. This includes replacement of some low reliability rental shuttle cars and a low performance rental continuous miner. Bounty has adopted a rigorous maintenance regime to ensure ongoing reliability of the fleet until it is replaced with better equipment. Finally, the ongoing addition of new spares and inventory, including two retired continuous miners to be used as spare parts, and upgrading cutter heads and coding on existing spare parts, will also improve overall plant performance.
