lets work out fmgs cash flow, page-22

im pretty sure FMG is a price taker, the benchmark price is around $144 USD per dmt. so at a grading of 60% = $86.40 USD per tonne shiped. i think you will find that at the AUD rate they quoted $0.87 it works out to be very close to the revenue figures they used.

again, if the benchmark price falls 25% and the AUD stays at $0.75 and FMG can do 55mt pa then its cheap. just as the Citi research says, their target is $4 or there abouts.

as for cash flow being negative, that might be due to the fact that they are using their free cash flow to further increase potential output.

i think FMG was over priced at $12 but at these prices i think it looks attractive.

the $25 per tonne cost is pretty much inline with others, infact if you look at AGO etc you will find their costs even higher, probably around $40 per tonne. So i think the $25 per tonne for FMG is pretty close to the mark, as the quarterly points out, they are making even more from the USD/AUD exchange rate at present.