Price of Iron Ore, page-732

From the last Q: Unaudited C1 Cash Costs for the September Quarter were A$86.77 per wmt shipped.

And margins: Unaudited operating margins averaged A$73/wmt FOB for the period.

The average prices thus far for this Q is still well above $US90 for gradings that FEX sells and that is without hedging. Just looking at this quarter, 150kton of product is hedged at A$230.3/dmt. Anything above is at the Q average pricing - in which case daily price movements are not the end all in any case.

The upcoming Q result will depend on grading, amount sold, Q ave pricing for both grading and shipping costs plus of course the exchange rates. As long as current hedging is maintained, this coming Q should have good operating margins - irrespective of daily price drops and that may also be said for the next few quarters.

One can never tell, but further hedging arrangements may be announced down the track prior to the ending of existing hedging arrangements
- but of course won't be on the same terms but nevertheless with the assumption of being lucrative and at higher then current spot prices.

Unless I'm mistaken, based on the unaudited metrics from the last quarterly, even if IO price levels hover around US$80-100, operations are still profitable even without hedging, albeit at much lower levels. Panic stations unwarranted, as seem to be indicated by current share price and some commentary. Meanwhile, management may also be able to implement further cost saving measures as they see fit. Admittedly, current share price is not pretty - unless one wishes to buy in or add. AIMHO.