Exciting figures nectar! I agree with you regarding the next few...

Exciting figures nectar! I agree with you regarding the next few years, if the pellet price can hold up then Grange looks to have a cash generator which will provide valuable funds to build an even larger cash generator at Southdown. I haven't held since before ABM/savage river was acquired but I'd be interested to hear if people who have are now happy with the whole deal...?

I'm not 100% clear where the profit for FY2010 came from, but I don't think it was operational. They made some hay selling at the spot price but the report states that they ran at an operating loss of $17.9m and the profit is all due to an ~$84m deferred consideration restructuring.

I'm pretty sure this is in relation to arrangements they made with Stemcor who had a deferred consideration where they took 20% x (pellet price - $US47) x production and I think the main issue here is the $47 (which I assume is supposed to roughly represent costs) not being indexed to anything. Now instead they take 2% of gross revenue. There aren't any notes to the prelim report so I assume they valued this change as a one off $84m which we wont be seeing next year. I also suspect last years profit was due to the deferred consideration because the pellet price dropped and it all of a sudden wasnt worth so much. They've now done some fancy footwork with stemcor to not have to put a massive loss in this years column for deferred consideration (as the price has risen significantly). There's detail in the quarterly report 2009. If anyone can explain this better please let me know because I remember being confused over this issue when the 2009 FY report came out (as it's nice to know how your company just made $140mil!)

Regardless I think management have done some good things of late in turning around the mine operations and simplifying strategy and hopefully the pellet prices remain high to reward them (and us!) for this.