MGT

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14.5¢ magnetite mines limited.

Realinvestor1 you laugh and you laugh at sensible posts and then...

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sharebroker1

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18/07/21

13:43

Post #: 54582971
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Originally posted by Realinvestor1: ↑

I have been reading few non sense posts about the high cost of producing magnetite and MGT will be one of the highest cost producer. I laugh and laugh and feel sorry for those people with such a poor knowledge about cost, revenue, profit, IO grade etc. Their posts are so ridiculous and ill informed. No wonder the stock market is so irrational lately as all these kinds of people are in the market buying shares. I give you a comparison of cost between FMG and MGT. Note this is relative comparison based on the grade. FMG’s cost is for DSO ore.

From the 2020 FMG annual report (all numbers in USD).
Average price of 62%fe $93
Average price realised $79
Average IO grade 58% fe.
Premium per fe% (93-79)/4 = $3.5

MGT minimum grade 67.5% fe.
Premium price over FMG’s 58% DFO (9.5 x $3.5) = $33.25

FMG all in operating cost $25
MGT all in cost ($55+ 2.38 royalty) = $57.38. Royalty is 2% for the 1st 5 years.
58% fe Equivalent cost of MGT ($57.38 - $33.25) = $24.13. So MGT is actually lower than FMG is relative terms.

These numbers are taken from FMG annual report 2020 and MGT PFS 2021.

So what does this mean?
MGT’s all in cost is on par with FMG taking into account the premium of higher grade product(Mark confirmed this in one of his interviews before the PFS). MGT costs doesn’t include potential saving from NextOre technology. So it will actually be a lot lower than FMG cost. FMG reported $12.94 as its C1 cost in big bold letter but that didn’t include freight and royalty so the actual cost is nearly double that.
In terms of actual margin per ton, MGT actually could be better.

So the question is why FMG is so profitable but MGT’s estimated profit so low in comparison? The answer is simple, it’s the quantity. FMG shipped 178.2 million tons in 2020. MGT planning to ship 2.7 million tons. The more quantity you sell, the more profit you make.

I won’t be surprised if I see some dumbs comments saying there is no comparison between FMG and MGT because I have seen more stupid comments than that.

So guys relax. MGT is not going to be high cost producers but will be one in the lower end of the cost curve. What we need is to ramp up the production level. Just doubling the current production level to 6 million tons with additional 90% in Capex will increase the after tax project NPV to A$4 bil at US$110 62% fe reference price.

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Realinvestor1 you laugh and you laugh at sensible posts and then post this nonsense?
FMG what a joke talking FMG in the context of MGT!

MGT have Billions of shares on issue, they have no money in the scheme of things to develope infrastructure that would be a cost in the many many hundreds of millions of dollars to even get to start production stage, that if course if it's even viable ! This simply means much more dilution, and they better raise soon at this rate of downward momentum this could possibly get ugly imho!

Look at the downward market momentum for MGT ! I would certainly not be laughing at that !
I would be taking Puddle pirate post very seriously if I were you ? Imho MGT will be in the 2 cent range in the very near term imho, and then ??. No laughing matter !

Last edited by sharebroker1: 18/07/21

MGT Price at posting: 4.3¢ Sentiment: Sell Disclosure: Not Held
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