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04/07/19

23:02

Post #: 39381628
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Originally posted by asb83: ↑

OK, so I plugged in some numbers and GXY probably was cashflow positive at Mt C in the 2nd quarter. But it's not exactly something you would want to write home about.

GXY shipped 30k in the 2nd quarter. So if they produced 45-50k in the quarter at, say, a cost of US$375/t, that's a total production cost of roughly US$18m using the middle of guidance. If they got, say US$675/t, they would have received US$20m. So they probably were just cashflow positive in the second quarter.

But you need to remember that this is a $500m+ company. Most large resource stocks on the ASX trade around 4-6x FY19E EBITDA.

If GXY shipped all 50kt, they would be making around US$15m EBITDA or annualised US$60m = AUD$85m. So it's trading at about 6x EBITDA.

Then you need to factor in further lithium pricing declines, which are about as certain as night follows day. A share price of low $1s would provide a better entry given its already trading at the top end of the industry range with further EBITDA weakness to come.

Hopefully this is of benefit to some.

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Oh wow, I ran some numbers and we didn't make any money last week asb. You see, we did some mining and stuff that cost a bucketload, but we didn't have any income. Oh no. We're trading at a P/E of infinity!!
Sheeeet. I had better sell my holding tomorrow.
We're certainly doomed.
Lol.

Do you come up with this stuff yourself or is Col helping you out...?

GXY Price at posting: $1.31 Sentiment: Buy Disclosure: Held
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