AGO 0.00% 4.5¢ atlas iron limited

Shareholders seem to feel a rail line will boost the share...

  1. 47 Posts.
    Shareholders seem to feel a rail line will boost the share price.
    But will it and by how much?
    Each FMG rail train pulls approx. 32,000 tonne and will require roughly 13 trips per day to move their 155mt p.a.
    Atlas will only need 3 trips per day to move 31.5mt. This will be a gross under utilisation of the proposed rail line.
    Current cost to truck the ore is $13 per tonne,(restricted)
    We need to increase production by 15mt and it seems that can't be done by road so rail is the only solution.
    A 260km rail line should cost between $3-4m per km or just over $1b.
    The extra 15mt delivered fob should provide AGO with an additional $600m p.a. with a pay back of less than 3 years.
    The sensible option is to share the cost of the Reinhart rail since they too will be under utilising their rail.
    Either way let's borrow and do it.
 
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