Answers all in opinion:
"It’s all well and good throwing airy fairy numbers out there but how’s about answering the how?"
Asx_dude: Airy fairy? What about those sensational IO doom stories, China 'concerns' and pessimistic IO forecasts by the experts over the years while resource investors have enjoyed a recovery. How many years did the experts overcook downside while resource holders flourished?
"How are they going to get to
11-14mt?"
Asx_dude: CD or McPhee could be fully funded with enormous cash about to be earned over the next few quarters. Ridley if JVed. High Grade oh yeah...BHP/Rio/FMG could only wish they had Ridley.
"They need to bring on CD to do this.. when are mgmt going to pull the trigger?"
Asx_dude: I suspect when they are debt free. Patience, it will happen this year.
"My guess is not for at least a year and there is at least a years construction time so this project is over 2 years away minimum, especially with cliff at helm.."
Asx_dude: Thats your guess... Correct me if I'm wrong but I understood CD would not take
2 years to ramp up.
"How are they going to reduce cash costs... as their mines get further and further from port and strip ratios increase? No solution to trucking in the near term..."
Asd_dude: Their costs won't change too much but there are uncontrollable variables at play which could move costs either way. It seems JVing is the way to go. Will majors reduce cash costs in the same environment? Atlas could potentially JV part of its Ridley asset to get a rail deal to lower its costs. Electric trucks / cheaper constructed rail solutions will reduce costs. Bigger road trains will reduce costs. Isn't Mt Fransisco and Pancho fairly close to port anyway from a Lithium perspective?
"How is hedging clever?"
Asx_dude: If it wasn't clever it would never exist as a financial option.
"They are at the top of the cost curve and are very marginal producer"
Asx_dude: The top? I dropped my wine on the carpet... Really? Refer to the first point you made. AGOs costs are reasonable and one of the cheapest marginals out there higher than Roy Hill and majors on the cost curve. Upper middle of curve and way below many global peers and China producers.
"- if they were clever they would cut costs so that hedging is not be necessary (do you see bhp or Rio hedging?)"
Asx_dude: In opinion, AGO is a small agile miner who can move quicker than bigger peers and has turned itself around from near death to be heading for debt free this year. If you were a shareholder of a major miner would you be happy with progress over the last few years?
"All the other stuff about lithium potential, gold potential and Ridley... well even blind Freddy can see that is wishful thinking."
Asx_dude: I'm sure that investors with the name of Fred who have invested in AGO as happy holders would disagree with your comment. Do you invest for the future or the past? The market is forward looking. AGO has upside which even majors would envy. Ridley is a fantastic High Grade resource. As PLS is excited about Mt Fransisco potential, that could be a good earner for AGO along with Pancho as it's 100% owned. How many other small miners has the diversication potential of Atlas. Not many....and Atlas is already earning cash to fund its future exploration to diversify. Much better than many one trick resource ponies out there.
"This gets to $1bn mkt cap on $100/t IO."
Asx_dude: This is the only comment I partially agree with. I agree that AGO will get over 1 billion MC again. For this I will give you a thumbs up for your effort. The thing is you're only considering one factor. That's the IO price. What about Lithium and JV incomes. What about demand and peaking supply driving the price up beyond 100 per tonne which could easily happen as inflation rises. What about future productions based in a optimistic forecast. Go on, you can do it.....
Any more questions?........
