There has been an interesting disconnect happening between the...

There has been an interesting disconnect happening between the 62% and 65% Fe pricing.

Over the past month, the 62% Fe prices have moved around the median line, but are basically unchanged today from where they were a month ago.

Meanwhile, 65% Fe prices have risen from about $142.50 to $160.39 (+10%) in the same one month period - suggesting that mills are actively seeking the higher % ore (likely more efficient to process and hence more profitable for them, despite the higher prices).

This trend bodes well for MGX, but we are yet to see the full impact of this disconnect in MGX's share price (on top of its ongoing improved operational performance) relative to the big players. Over the past month, FMG's share price has been effectively stagnant, whilst MGX is up 10% from a month ago - but all of that MGX uplift is due to their earlier confirmations about Q4 performance and expectations for Q1, FY24 which saw the price rise to a peak gain of 26% on 19th July (from 10th July), but has since settled at a net gain of only10% since 10th July. FMG in same period is unchanged from its 10th July share price.

At current 65% Fe and FX prices, I estimate each shipment is delivering about $7.45m EBITDA after allowance for discounts, etc - or an extra $1.5m per shipment from the 65% Fe + FX prices of a month ago. That is a material (+25%) uplift in EBITDA per shipment - yet to be reflected in how Mr Market is pricing this stock.

Mr Market in inherently inefficient in the short term, but in time I am certain will wake up to this and eventually re-rate.