K58, from the purpose of a trading strategy my I ask if the recent attempts to scalp some profits worked in this rapidly falling stock? No malice or "I told you so", just a matter of interest.
I have no reason to doubt Croker as an employee and his first hand view on ground zero, I had suspected that part of the aggressive cost cutting involves stretching the maintenance of equipment to reduce expenditure. This to me is a band aid approach and no long term cost reduction benefits. Sooner or later you have to maintain/replace equipment especially when mining IO. My casual discussions with people in this industry suggest the wear and tear on the haul packs and tyres is far more severe than others types of commodity mining but without personal mining experience I can only take face value acceptance.
I gather you are an accountant or associated in this industry so if you put yourself in the shoes of a potential Chinese investor, would you purchase an equity stake right now? Bearing in mind script is the lowest level of the food chain of ownership if the company has cash flow issues in the future. Without intimate understanding of the bond market industry, I am suspecting that the safest ownership stake is through FMG corporate bond exposure being the major bulk of the creditors. I am aware each type of "paper" ownership has their pros and cons but FMG is in a perilous position right now and the bond market is factoring a very high risk outcome through their transacted yields out of the US junk bond market.
Pure speculation on why they pulled out of refinance last month but Twiggy has always had a history of inappropriate or too concise use of contents unless it suits him. Who know the real reason why the pulled this option.
IOP spot dropped to $47 today so even the big boys are feeling it on their SP so what will happen on TUesday? Somethings to ponder on the riskiness of holding this sector in general with rosy tints.
FMG Price at posting:
$1.82 Sentiment: None Disclosure: Not Held
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