I would like to start a new thread today in relation to the pre-payment. I would hope that posters will keep all discussions related to the thread please...
We know that Marcus Hughes has come from FMG, where they also did deals with buyers with pre-payments....please see below article below:
FMG offers iron ore pre-payment deals.
Nick EvansThe West AustralianWednesday, 31 October 2012 12:27PM
FMG offers iron ore pre-payment dealsNick Evans,The West AustralianWednesday, 31 October 2012 12:27PM
FMG offers iron ore pre-payment deals Credit: The West AustralianDespite buying itself $US5 billion ($4.8 billion) worth of breathing space on its balance sheet through a debt reconstruction last month, Fortescue Metals Group is moving to get its ambitious growth plans back on track, offering prepayment deals to iron customers in order to pull more development capital.It is understood Fortescue has approached a number of its iron ore customers, seeking $US100 million to $300 million prepayments for iron ore in order to help bring construction of its $1.1 billion Kings mine back on line before the end of the year.Sources say the company has approached existing customers and major trading houses, offering off-take deals for upfront payments.A Fortescue spokeswoman confirmed the company had received "exceptionally strong interest from customers who are keen to secure long term supply arrangements"."This interest may be in respect of projects currently under construction or future iron ore development projects," she said. "This may include . . . prepayments . . . consistent with arrangements we've had in the past."Nearing the peak of its capital spending program, Fortescue is understood to have also asked the WA Government for temporary relief on royalty payments for two quarters, a move that could free up as much as $400 million for expansion.Fortescue has also been open about plans to sell more assets, flagging the possibility of offloading power stations, mining camps and other non-mining infrastructure.Fortescue was typically bullish about its plans on a site visit last week but analysts still emerged with doubts about its production forecasts. In a note yesterday, Deutsche Bank's Paul Young said Fortescue's target of exporting at a rate of 115 million tonnes a year by July 2013 "remains highly aggressive"."The biggest challenge to hitting targets appears to be mobilising and staffing the mining fleet, and then scheduling and hitting target utilisation rates," Mr Young said. He said that to hit these targets the company needed to move more than 150 pieces of equipment in the next three months."We walked away with the same concerns as before, those being with the aggressive mining ramp up and high costs, however we were impressed with . . . progress at both Solomon and Christmas Creek, but still unconvinced that the operating cost targets can be achieved."Fortescue shares closed at $4.10 yesterday, up 7¢, or 1.7 per cent.
So, I know this is just similarities and maybe a stab in the dark, but Marcus could be trying to clench a similar deal with SKI over the past few months, and that is why company members are on lockdown, and no social media leaks etc....
It makes sense to me with all the things that have been happening over past 6-9 months (I don't think I need to list them all again).
We know that the pre-payment is for product, and the figure I believe AUZ will be asking for would be similar in order to get this plant going by April next year. It is in my opinion that SKI need our material in time for the Georgia plant they are constructing in US, as it has been estimated that the material from AUZ is enough for 3-6M EV over 30years just from Sconi alone....so SKI hitting such a big market would want to make sure they can secure this with AUZ pretty quick and all the material they can get their hands on....
Going to be a massive week if AUZ board and Marcus and team can pull this off !!!
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