Ref AGO, to the best of my knowledge. AGO is trying to achieve a delivered to China price of $75pt, given a bit of free slack lets say $80pt is achieved, at an average price of $140pt au - $60pt EBIT at 10,000,000 tn - $600000. A possible $350M NPAT. At a PE of 10, possibly $3.80, if all went well. The real story on supply is: China is fast running out of quality Iron ore (ref Sam Walsh report Rio Tinto) China costs are as much as US$170 pt. And Brazil has a freight charge of US$53pt to China Aust only $13. I know some Experts?? say Iron Ore will drop to $80 US. If this were right Brazil is out of business. Another rumour is China has massive deep Iron Ore deposits yet untapped. However underground mining is at least two to three times more costly than open cut. The truth is, miners in the Pilbara have a clear and distinctive advantage both in price structure and location. AGO has a clear expansion plan, plenty of cash and making bucket loads more. According to UBS who have a price of $130 Us pt going forward, China is drastically short of workers and wages are rising at a rate of 10%pa. (ref CNBC 25th Jan. UBS also stated Iron Ore prices will rebound the second week in Feb after the Chinese New Year. So hold on for the ride, Good luck everyone.
AGO Price at posting:
95.0¢ Sentiment: LT Buy Disclosure: Held
