So parcs and redrock hows the BHP investment look, buy on the...

First 11 Last

Share
Profile

Follow
eyeswideopen

11,422 Posts.

504

24/02/16

10:03

Post #: 17100613
Share

Originally posted by parcs ↑

We have already seen the numbers, they came out in the quarterly.

We know AGO lost A$40M last quarter.
We know at the end of last quarter working capital was down to A$49M.
We know the full cash cost, forex rates, cash position and production figures.

All this came out in the quarterly.

What we don't know is:
Impairment write-downs - does this put AGO under the debt-equity covenant?
Details of current and non-current liabilities - is the state royalty debt included in the A$59M of current liabilities?

We might see a couple of standard motherhood statements but anything material regarding current operational costs, revenues, profitability or debt restructure would be released separately (continuous disclosure).

AGO is not going to put out an investor announcement stating that yesterday's IO delivery into China saw them become "profitable" for the first time this year (and probably the first time since October last year). I use the term profitable loosely as there are a number of cash outflows not accounted for in the full cash cost figure such as capital costs, depreciation and principle debt repayments.

TB, $12/t? Really?
If they were selling 62%Fe maybe, but AGO sells 57%Fe at a 20% discount. Based on your "maths" AGO are still losing $1.65/t, only $68k/day.

SP might move up on IOP but IMO, don't expect to see a reversion to 3.3c any time soon. AGO has lost something like A$50M since the SP was last 3.3c. Take $50M off the MCAP when SP was 3.3 and you have an equivalent of today's SP of 1.4c. Less resource depletion, market uncertainty, impairments and write-downs, a potential costly CSA - what is fair value?

Expand

So parcs and redrock hows the BHP investment look, buy on the high?

AGO Price at posting: 1.4¢ Sentiment: Buy Disclosure: Held
Upvote

0 Great analysis

Reply

Top Stories

SRL

Scandium a priority metal for Sunrise as it plans feasibility update at Syerston

MM1

Midas logs 17 spodumene pegmatite targets over 4km at Aylmer Project in Canada but drills while off

AZY

Antipa's Minyari Dome reveals gold up to 24g/t through drilling at key prospect

OCC

Orthocell shares jump on record revenues from sales of collagen bone repair devices globally

PYC

PYC commences new study on drug for eye condition Retinitis Pigmentosa type 11