shipping signals, page-40

Perhaps there is some truth to the rumour that they are no longer shipping MGX ore.

Interesting to note they have maintained a shipping rate equivelant to 10mtpa since early october. Previously it was 7mtpa

They aren't making 68% fe magnetite shipments because there is no ASX announcement. I'm sure that if you asked they will tell you they will make an asx announcement if they ever ship >68%.

Still, 10mtpa without any MGX ore would be a 4mtpa increase in production. The question is how. It isn't 68% magnetite so there are 3 possible remainders.

1. Shine ore (would have expected an announcement again)
2. Increased DSO production or reduced quality limitation for shipments.
3. Increased <68% Fe magnetite production.

Strangely, I consider myself to suffer from a serious ase of optimism bias and thus am discounting option 2 solely based on my bias nature. Assuming my optimisim is correct then I think they might be up to like 6mtpa un rate of 62% fe magnetite and thus almost cash flow neutral. then again, 6mtpa of 62% and 4mtpa of low grade DSO is about $1 billion in revenues while costs are about $1.1billion annualised so perhaps I am too optimistic. Still, at least shipping has ramped up in volume for the first time in a year.

I guess we should expect increased volumes without the ability to deliver 68% in next weeks AGM announcement. It'll be interesting to see how the market views this progress. Increased volumes are good for the bottom line and progress must be occuring but a failure to deliver any 68% ore shipments is a real issue. One that may have deeper roots than we would like. I just hope this increase in production isn't associated to their focusing on mining of low weight recovery ore. or option 2....