Gassin, I agree even at US$100 AGO will still have a very healthy profit margin.
Assuming A$ is at $.85 and AGO can hit their H1 target of 15m WMT, then taking into account quality and moisture discounts etc then operational profit would be in the vicinity of $350m. Even at $90T it wouldn't be looking bad by any means.
As others have said many times, the profit is flowing but it is currently all being put back into future expansion (a very good thing in my opinion) I recall reading something recently in regards to Capex expenditure reducing shortly? Others may be able to shed more light on this? So it is looking like cash is going to be filling up the bank account soon, hopefully it will fill up the share price along with it!
It is certainly frustrating that AGO remains so undervalued and unappreciated by the market. All this talk about a rail deal hanging over their head, but even without it things are currently looking fantastic in my opinion.
More importantly,I highly doubt that Ken and Dave are going to engage in any rail deal that is going to be destructive for shareholder wealth (I believe something along these lines was said by one of them recently)
The only thing that makes sense to me is that there is caution around the possibility of a capital raising to fund what ever deal is struct. With such a supposedly value adding deal do people really think that shares would need to be offered at much of a discount to the current price? I for one don't think so.
I will be patient with AGO. The Market will wake up to this this sooner or later!
Cheers.
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