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4.5¢ atlas iron limited

Iron ore price, page-5781

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Gekkowolf

2,399 Posts.

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28/11/17

17:24

Post #: 29188388
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Originally posted by asx_dude ↑

All in opinion:
World financial analysts/commentators have got it wrong in being overly bearish with regards to investing in commodities and resources compared to many bubbled sectors.

Tech
US tech stocks with high PEs must be questioned as overvalued.
Tech bust remincient of 2000 brewing?....

Bitcoin / Whatever Coins etc etc.
Seriously......$US8000+ per coin in value. Once it peaks (long overdue) what do think will happen? Steady? Lol. It has a place however, this is beyond euphoria. The crash could be spectacular as investors cash out and run....

Property
US recovering as it talks about building a better America. Get on with it will you....
Australia - Overvalued. It won't be pretty... Too much debt, rising costs of living and wages stagnation.
China steady and has a long way to go (only 50% urbanised) as it gains momentum into urbanising into central parts of China.

Commodities.
On a LT cyclical recovery.
Commodity market cyclical low in 2015-2016. Bears would of most likely cashed out then.... Bears which had not yet hibernated must be getting grumpy as IO price maintains its LT cyclic trend UP. Plenty of demand over the next few years: one belt road road, India housing for all and smart cities, SEA, UAE, US, global growth out of GFC, Africa. Plenty of demand.... Supply and demand has already balanced as demand ramps up.
Expect money to move from bubbled sectors into commodities. Its inevitable as it's time for financial instos to replenish exposure to value commodities and companies with value PE ratios who provide most upside.
Cost are at lows for all miners. Not much wriggle room to go lower and what is the point, it's all about profit generation for investors with a balanced market.
Commodity prices of resources on the rise.
Debt rapidly reducing.
Profits flowing.
JVs more common to share risk and not repeat past mistakes during mining investment boom.
We are now in mining profit boom.

AGO History
Once a 4 billion MC producing much less than now and not diversified.
AGO now has MC of 170 mill with plenty more options on the table.

AGO 2011
MC of 4 billion+ (Shareprice @ $4 per share)
AGO produced 4.6mil tonnes
Had 375 million in cash and no debt.
Had C1 cash costs in range of A$40 - A$43 per tonne (FOB)
Had a good history of aggressive drilling in Australia.
Joined S&P/ASX100 list in March 2011.

AGO 2017
MC of 170 million (Share price @ 1.8 cents per share)
AGO produced up to 13 million tonnes.
Has C1 cash costs in range of A$34 - A$36/wmt per tonne (FOB), Full cash costs A$53/wmt. DOWN Significantly.
Has clever hedging in place to protect exposure to IO volatility.
Has more cash held than debt.
Has JV with PLS.
Has Lithium potential.
Has Gold potential.
Is on target to pay off debt completely during 2018 and diversify.

Realistically, given the production numbers, its profitability, its income generating JVs, its hedging strategies and its diversication upside to unlock, AGO being a PRODUCER should have a MC 10 times what it is now. Easily valued over a billion dollars.

This shareprice has been crawling along for far too long as upside clearly boils. Once the upside pressure builds, AGO will lift off aggressively.
10-20c VERY achievable within the next few years.

Good luck holders.

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I reckon the challenge for low quality iron ore producers such as AGO is the Discount. The discount is wider now and the Chinese want to buy top quality iron ore because of pollution concerns.

AGO Price at posting: 1.7¢ Sentiment: None Disclosure: Not Held
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