Wouldn't call it an "easy" hold the way the stock draws down
. But over time it will survive and definitely do a lot better than what recent price action suggests.
Main risk is still tin price. LME cash ended around US$31k/t last night. Today, cash prices in Shanghai perked up a little to about US$37k/t. I don't know what the typical spread to LME is, but from memory it's around US$5k/t. Hopefully LMS cash stays above the US$30k mark.
@Cashmeoutside, if capex goes close to zero, what does that mean for AISC? C1 cash production cost was about A$15k/t. In case of a recession, we need to be able to survive tin prices at, say, US$25k/t (about A$37k/t). In order to maintain A$20k/t margin over AISC, we need AISC to drop to A$17k/t. Possible?
Lastly, management needs to weigh share buybacks vs Rentails capex. At a share price sub 40c, wouldn't it be far better to do a share buyback? Obviously feasibility details on Rentails are not available yet, but the lower the share price goes, the higher the hurdle for Rentails. A share buyback sub 40c could be a far better choice in terms of ROIC for shareholders. Just my gut feel.
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