Obviously no one likes dilution, but I guess they are the terms. Whether they dump or hold is unknown.
The only bonus for us is that in order to obtain the performance shares, they need to sustain at least 3 months worth of high production. We should see this in the quarterlies, hence will be able to bail out before them if things don't look so good.
From what I can make out, the current ore is producing only 18% iron (77,631/428,208). I can only assume this is because the ore is from the surface. As they get deeper, it should get to 33-41%.
Once we start our own production, costs should get a lot cheaper, thus the margins will grow. Being Brazil, one would expect very cheap running costs. Until we get updates though, again this is unknown.
I'm in for now. I see a good chance of a short term gain. Whether I remain long term depends on the figures as they come to light.
SFZ Price at posting:
32.5¢ Sentiment: Hold Disclosure: Held
