A few years back FMG was stating their estimated break even...

A few years back FMG was stating their estimated break even price based on the benchmark price in their investor presentations, so I started using that break even price and the actual bench mark price to estimate their profit.

At first, like most people I thought $1 above break even meant $1 of profit, but of course that is not the case, because that additional $1 attracts a royalty, grade discount, moisture discount etc, and then the final profit is taxed.

so over a little bit of time I developed my rough formula I mentioned above, where I realised that $1 difference between break even and bench mark nets out to about $0.50 in NPAT.

of course it’s is only a rough guide, because the variables like grade discount, and costs etc fluctuate, but it’s accurate enough to give you a decent estimate of their performance at any time based on current bench mark pricing.