Thanks for the reply Sjlasx.But I'm trying just to work out the...

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astro boy

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17/12/19

15:00

Post #: 42011735
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Originally posted by Sjlasx: ↑

I think there are two perspectives for that answer.
The first, and my preferred choice in GXYs situation, is to look at cost of goods sold (COGS) in which case the cost of mining that product should be considered when determining the minimum price GXY should be prepared to sell their product at. No point selling at a loss unless necessary.
The second perspective is in terms of cashflow. One could argue the mining costs for example have already been paid for and expensed, so there would be an operating profit with a positive cashflow. This is what I believe you are looking for.
If GXY were struggling financially with debt obligations it would make some sense to bolster cash by selling product at a margin that covers the non expensed costs.
Personally, considering GXY has plenty of cash in hand and many indicators point to a reversal of pricing in the next twelve months, I believe it would be irresponsible to push customers to take more product by dropping sales pricing.
COGS is what is important. Just because it has already been paid for and accounted for, doesn’t change the fact that it is part of the cost of producing the product.

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Thanks for the reply Sjlasx.
But I'm trying just to work out the dollar value attributed to the physical aspect of what would be paid to the contractors to get it to where the old product is now.
Thanks again for the reply, I'll keep digging
All the best

GXY Price at posting: 89.0¢ Sentiment: Buy Disclosure: Held
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