Alfien, my figures include a 20% premium for magnetite and a 7% discount for DSO. So I have accounted for the premium. I just use the spot price as the headline rate then my model adjusts it accordingly.
We are viable at $120 per tonne and the current high AUD. The cash profit is actually higher, so debt repayments/interest can be met.
The EPS greatly increases if OPEX was to go down to the previous $65-$68 as opposed to the updated $72-$76 (I used $74).
Keyser, I agree, the AUD should fall which should make GBG more profitable. I am hoping the RBA continually cuts rates. We are already at GFC low rates, which signals how $%^&ed the Australian economy is. I see it first hand in the corporate world anyway.
Look, I am really hoping iron ore prices stay $130-$150. I really do, as I will recover my investment. But I am skeptical. I'll buy another small parcel of shares in my SMSF is GBG tanks below 30. But thats about it. Have enough of these in my personal name.
GBG Price at posting:
31.0¢ Sentiment: Hold Disclosure: Held
