Flip61 said:
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@Flip
Re the 28.3. That's forecast not achieved yet so far as has been reported, but that's a quibble.
This slide below shows the elements that go into making up the 28.3 figure FMG uses for its "all in breakeven price on a Platt's 62 percent CFR basis". Source of the slide is on it. Notes are mine. Please note the Capex figure of 2.6.
This slide shows the debt that FMG still had outstanding. Source is there. Notes are mine.
Now FMG has to pay off the principle on its outstanding debts (obviously) as well as the interest. And the principle will be paid off from part of the revenue it makes. Assuming FMG produces 170 million tons of iron ore a year, with two and a half years, FMG will need to make US$7.00(etc) ... per ton. (the Red arrows).
The blue arrows show the three year period which FMG might have to pay the principle on the later tranches of debt. Again assuming 170 million tons of production per year each ton of production has to cover a certain amount of the debt repayment in USD on average.
Here is my problem.
No where in the the first slide does FMG include provision for paying off the principle as part of the all in break even price. The Capex figure of 2.6 simply isn't large enough.
Yet clearly FMG has to pay of the principle on the debt as well as the interest and they have to do it no later than when it is due and they have to do it from the revenue sources they have which is iron ore tons sold.
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