Price of Iron Ore, page-1578

I explained these facts about a month ago but seems rational is limited with some. I said a month ago that if prices go to 140USD per tonne then Shine would likely become profitable above that (prpbably even down to 120USD which would be close to break even).

I would not be suprised already personel are being selected and organised to mine this resource for export planned by March 2024. Why so soon?

Well it is a dormant mine it is ready to go. It should only take 1 or 2 months before the first ship load is sent off.

The IO price is the only concern. So i think best to secure a hedge on 40% to 100% of the expected production rate. As long as that hedge is priced at a profitable rate then it should be fine. Atleast then some stability is secured.

I personally like the idea of 50% hedged.

1. If issues arise from production then it will not be as hard to satisfy the hedge arrangement.

2.The rest of the production has risk but has risk to be sold on the upside on comparison the hedge. And can be additionally hedged if all things seem to be going well

3. A partial hedge of say 50% production is also is good in a senario that say 4 months after production starts iron ore prices crash below 120USD per tonne. Then management can start to stockpile some tonnage and then wind down minining and draw down the stockpile until the conclusion of the hedge, but the smallish (100,000 to 200,000) tonne stockpile has the positive in that if prices poke above say 130 USD per tonne say again in later in the year then it can be sold near immediately and another hedge can be arranged, which allows some amount of mining to resume.

Unlike the iron ridge mine. I think hedges would need to be 1 year in length. again adding more hedge every 3 months.

Again as I said a month ago. Getting a few million or more out of this site would be a bonus on something that was probably thrown into the deal as both parties considered it to be an asset with little value.